Israel Emerges as Global Cyber Superpower

Sales by Israeli companies reached 10% of world total, figures show.

Amitai Ziv
Amitai Ziv
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An IDF course for cyber-defense in Ramat Gan.
An IDF course for cyber-defense in Ramat Gan. Credit: Alon Ron
Amitai Ziv
Amitai Ziv

Israel has emerged as a cyber superpower, with Israeli companies accounting for an estimated 10% of global sales of computer and network security technology, figures released from the National Cyber Bureau over the weekend showed.

Israeli companies sold some $6 billion of cyber technology last year out of total global sales estimated at $60 billion. Israeli sales accounted for 8% of total cyber turnover globally in 2013, meaning Israeli companies’ growth outpaced their rivals overseas.

Moreover, Israeli research and development spending in cyber accounted for 15% of the global total last year and the pace grew in 2015, according to the bureau, which is a unit of the Prime Minister’s Office.

Last year Israeli companies spent $200 million on cyber R&D, up from $51 million four years earlier, according to the bureau. In the first quarter R&D spending jumped 40% from a year ago to $90 million.

“The data demonstrate the importance of Israel as a key commercial player in world cyber,” said Prof. Isaac Ben-Israel, head of the Tel Aviv University Interdisciplinary Cyber Research Center.

“One of the main reasons for this is our national cyber policy, which came from the recommendations of a panel I chaired and that was adopted by the government in 2011. No doubt the Israeli ecosystem has encouraged research and innovation and has put Israel in the forefront of world R&D,” said Ben-Israel.

The bureau found that the number of cyber companies with a commercially available product or service doubled in the past five years to about 300 in 2014, with the number growing by 75 in the last year alone. Many of the companies have been targeted for cross-border acquisitions.

Eight Israeli cyber companies were acquired in 2014 for a combined $700 million and two others conducted initial public offerings on Wall Street. One of these companies, CyberArk, now trades at a $2 billion market valuation.

The bureau released the data ahead of an international cyber conference to be held June 22-25 at Tel Aviv University, sponsored for the fifth year in a row by the Tel Aviv University center. The conference will deal with cybercrime and terrorism and the ability of governments to combat them.

“The information comes mainly from big companies for which we have no little information – NceSystems, Verint Systems, Check Point Software Technologies and the defense industries,” said Ben-Israel. “But in fact the numbers are greater because we don’t count a lot of small companies in the market that are already at the selling stage.”

Layoffs at Logic

In related news, a major information security/homeland security company is beginning layoffs of staff and closing its operations in Israel. Logic Industries, which is controlled by entrepreneur Mati Kochavi, was expect to dismiss around 270 employees. In February, 250 of the company’s Israeli workforce of 600 before the dismissals were laid off.

The layoffs come as the company completes a major project for an unnamed Gulf country. Some 20 remaining employees will move to Logic’s parent company, Zurich-based AGT.

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