Desert Storm: Be’er Sheva Rapidly Emerges as Global Cyber Center

The government has moved astonishingly quickly to realize Prime Minister Benjamin Netanyahu’s vision of turning the southern city into the go-to place for computer and network security companies.

Eliyahu Hershkovitz

Many eyebrows were raised a year and a half ago, when Benjamin Netanyahu promised that Be’er Sheva was destined to become “the cybercenter of the Western hemisphere.” Many perceived the prime minister’s grandiose vision as yet one more pompous declaration by a seasoned politician, one that shouldn’t be taken as implying there is any kind of orderly plan for bringing it about.

It’s still early days, but the last year has set the “capital of the Negev” firmly on course toward becoming an important center of research and development for the global computer and network security industry. It may turn out to be one of the outgoing government’s most significant projects.

In January, Brandeis International Business School and T3 Consulting Group published research that received much attention in the foreign media for ranking Be’er Sheva the first out of seven global cities forecast to emerge as important high-tech centers.

In February, a second building was inaugurated in the Advanced Technologies Park owned and developed by the property company Bayside (Gav Yam), a compound designed to serve the many cyber startups and multinationals expected to set up headquarters or R&D operations the city. It will eventually number 15 buildings.

Not long afterward, the new park boasted its first exit: The giant online payment company Paypal announced in March it was buying the Israeli startup CyActive, whose software can predict how malicious software will develop and offer companies detection and prevention, and setting up its cyber R&D operations in the city. CyActive was backed by the venture capital fund JVP, the German electronics giant Siemens, Ben-Gurion University of the Negev and CyberArk Software, an Israeli company that went public on Nasdaq in September.

At the same time, an agreement has been finally signed among the finance and defense ministries and the Israel Land Authority to transfer army bases from central Israel to the south that will give another major boost to Be’er Sheva as world cybercapital. The agreement includes bases in Glilot and Ramat Gan that house military signal intelligence facilities, including the world-renowned 8200 unit, that will have a new home on the perimeter of the new high-tech park in Be’er Sheva beginning in 2020.

It won’t be long thereafter that newly demobilized soldiers will move a few hundred meters into the tech park when they start up their first companies.

Radiating optimism

With such a flurry of events in just three months, it is no wonder that most of those involved in the initiative radiate optimism. In a country known for chronic delays in projects requiring cooperation between two or more government agencies, it’s quite astonishing to see how in this case the cybercenter, a joint initiative by the government, the real estate company Bayside as well as Ben-Gurion University, the army, the Japanese-American company KUD International and the Be’er Sheva municipality, is taking shape.

A short while ago, Avi Yakobovich, the CEO of Bayside, celebrated the opening of the second building in the compound. He’s convinced that the park’s expansion will accelerate once the army moves in next door.

“Ultimately 200,000 square meters will be built in 15 buildings covering 100 dunams [25 acres]. Ten thousand people will be employed here, all at an investment of one billion shekels [$250 million],” he says. “Currently, the first two buildings have 32,000 square meters of built-up areas, with 1,000 people employed in 15 multinational companies.” He says a third building is under development.

Companies already operating in the park include a host of foreign and local firms such as Ness Technologies, Deutsche Telecom, RAD, Lockheed Martin, Elbit Systems and EMC, as well as a cyberincubator run by JVP, the venture capital firm. The National Cyber Bureau, the newly created agency that advises the government on topics related to cyber policies, will also be housed there in a few months.

For the companies that already operating in the area and others planning to join there is tense anticipation ahead of the transfer of army bases to Be’er Sheva.

Apart from a source for future cybertalent, the various military units dealing with signal intelligence are expected to become huge customers, making it worthwhile for companies to invest in establishing a presence in the area.

The university recently signed research contracts valued at tens of millions of shekels with the National Cyber Bureau, opening up new specialized training programs in cyber areas. A business environment that encompasses the private market, the army and BGU is shaping up.

Some of these companies may enjoy lucrative business even before the army arrives. In a few months, the army is expected to issue tenders for the construction and operation of the signal intelligence base in Be’er Sheva , as well as another intelligence base just north of the city. Only a third of the 12 billion shekels slated for these bases is for actual construction. The rest is for the technology the units will need, which will translate into a wave of fat contracts in the coming years. That is reason enough for companies such as Deutsche Telecom and Lockheed Martin to establish a foothold in this area.

When the backhoes come

“When they see our backhoes start working, the stock of the whole region will skyrocket,” says the person in charge of transferring the army bases, who asked not to be identified.

“When a company considers coming here, we meet with the university’s president, the mayor, representatives of international companies that are already here and a representative of the Defense Ministry. We present plans for the coming years and look at all the available options,” says Yonat Maraton Razon, the army official responsible for interfacing with civilian agencies to coodinate the transfer of the bases.

She says that these meetings are successful, convincing international companies to open branches in Be’er Sheva. “The city offers more technological opportunities than other cities in Israel, maybe even in the world, based on the findings at Brandeis University. Companies understand the advantages of coming here.

Last September EMC, JVP and Technologies BGN from BGU set up a nonprofit organization called CyberSpark Industry Initiative, which aims to give international exposure to the park.

The Cyber Park is only part of the story, not even the most important one. Around it is an entire city – large but peripheral – that still doesn’t know how it will be affected by the park’s construction and by the assimilation of its employees into its urban fabric. Will it change it in unrecognizable ways, as promised by decision makers or will it and the adjacent bases remain a foreign implant with little interaction with the city, as happened to some degree with the university?

Many related questions arise. Will the park’s engineers and career army officers from the adjacent military bases live in the city itself? Will their children attend local schools? Or will they shut themselves off in suburban communities or even commute from greater Tel Aviv using the much improved trains between the cities?

Still, the cyberinitiative is big enough to leave an impression on the city, come what may. There is already evidence of educational and technology investments in the city in science and cyber. Thus, for example, the 160-million-shekel Carasso Science Park was opened in 2013. More recently, it was joined by the Ashalim school for training soldiers in cyberwarfare in conjunction with BGU. A new campus is being built in the city for pre-military courses connected to military intelligence.

The Defense Ministry wants to leverage the presence of army bases to improve education in the city and increase opportunities for its young people. There are programs for identifying talented girls in their final year of high school who can write software for the signal intelligence units. The plan is to increase the current number of candidates coming from towns in the south every year from 12 to 50. The hope is that young people serving in the units will remain in the south when they complete their service, since they will have such a wide range of employment opportunities.

Be’er Sheva Mayor Ruvik Danilovich believes high-tech companies will set off a chain reaction of related development. He says a new technology center will open next year, a joint venture of the city and the Education Ministry. “This will encourage children to engage in technology throughout their studies. We want newly arriving high-tech people to stay here. The intent is to turn the city into a center for quality employment with high wages and a strong education system.”

The biggest problem is finding homes in the Be’er Sheva area for all the expected newcomers. The city saw only 638 housing starts in 2014, down from 933 the year before. However, the mayor says he is confident the trend will be reversed soon, with the rezoning of additional land for residential construction.