Israel well placed to mount defence strategy

Expertise nurtured in the army gives Israel’s security vendors a head start in war against IT threats

Israel is widely recognised as one of the world’s hot spots for the development of high-tech security solutions. The birthplace of Check Point, one of the last remaining major independent security vendors in the world, the country is also home to many other IT security-focused startups, many of which can trace their roots back to that firm.

“Check Point is now 15 years old and many security specialists that start there go on to form new security companies,” said IDC analyst Dan Yachin.

Shlomo Kramer, co-founder of Check Point, is a prime example of this. Kramer left Check Point to found application and database security supplier, Imperva, and has contributed to the funding of startups such as Trusteer, which creates solutions to protect online consumers against cyber threats. “There are a lot of experienced people in this market who know how to make a successful business,” Kramer said.

“We also have an investment community that understands enterprise security, and a culture that supports the world-class skills coming through Israel’s universities and technical institutions.”

According to Yachin, one of the main reasons why Check Point, and the Israeli high-tech security sector in general, has thrived is the exposure to new technology that young people get while doing national service in the military. “Many projects start in the army and then the technical developments find a way to the wider market,” he said. “Young people get to understand the security technology [while serving in the army], find some great idea and then bring the solution to market when their military service is complete.”

Gabriel Mizrahi, co-founder and chief technology officer of endpoint security provider PineApp, cut his security teeth while serving as an electronics specialist in the Israeli army. It was during this time that he first met Star Moyal, the firm’s vice president of research and development, who worked in the army’s encryption division.

The encryption techniques that Moyal picked up in the army have helped to shape PineApp’s product portfolio. At its first international customer event, held earlier this year, PineApp announced an update to its email perimeter solution, Mail-Secure, which is designed to let users send encrypted emails by simply pressing a button.

The solution will be fully hosted by internet service providers and PineApp said it will allow users to send encrypted emails without having to route them first to their organisation’s chief security officer. Users will also be able to create settings to define specific content they want encrypted. PineApp prides itself in offering strong solutions to firms that otherwise may not have adopted them.

“It is mainly banks that have email encryption capabilities because they are so expensive, but we are launching an affordable solution to the market that we expect will be a big hit with enterprises of all sizes,” Mizrahi said.

Michael Kasan, PineApp customer relations vice president, added: “We wanted to make our solution smarter than the other ones today and create more intelligent rules.”

IDC’s Yachin noted the emphasis Israeli companies place on R&D, especially when compared with their marketing spend. He said this contrasted with the approach taken by vendors based in the US and Europe, adding that perhaps Israeli companies would benefit by adopting a more aggressive attitude to sales.

“When you look at entrepreneurs in the UK, they come up with good business ideas but then find it hard to find a workable solution,” he said. “But Israel [is the other way round, it] needs to do a better job in marketing products.”

According to Gartner Mediterranean operation analyst Baruch Gindin, there are between 30 and 60 independent IT security firms in Israel. These include Applicure, which specialises in application security solutions, and BSafe Information Systems, which focuses on mainframe security. Also guarding its independence is Yoggie, whose Yoggie Pico USB device aims to provide a novel way to secure laptops.

This focus on R&D may explain why so many Israeli startups are bought before they have a chance to develop into major players. The long list of IT companies that have acquired Israeli startups includes such giants as IBM, Cisco and Microsoft.
Cisco’s head of security business operations, Elad Shaviv, joined the networking giant when it acquired Israeli IT security firm Riverhead Networks. He summed up the attraction of Israeli firms to the likes of Cisco in one word: integrity.

“A half-hearted approach to manufacturing in Israel is not accepted,” he said. “The major value [you can give to a customer is] to be a one-stop shop for all their needs.”