Israeli High-tech Firms Make Good Money in Dubai but Don't Want to Talk About It

Fearing boycott and competition, Israeli cybersecurity companies have been courted by the UAE for some time, but they keep mum about it

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Dubai Marina skyscrapers and the superyacht marina
Dubai Marina skyscrapers and the superyacht marinaCredit: Rastislav Sedlak SK / Shuttersto

After Israel normalized relations with the United Arab Emirates, we spoke with an entrepreneur at a veteran Israeli company (not involved in cybersecurity) that has been working in the Emirates for nearly a decade. “The fear of being exposed [as working in the UAE] has been twofold: First because of boycott groups – and in many cases middlemen from the Arab world also don’t want anyone knowing about the ties, so you are protecting them – and second because these are lucrative markets, and it’s better that the competition doesn’t hear about it and go there,” he says. “I don’t want anyone submitting competitive bids for ads on Facebook.”

PODCAST: Inside Israel's no-change, no-cost peace deal with the UAECredit: Haaretz

Many Israeli technology companies operate in the Emirates, but they are modest about it in publications, or hide it, fearing criticism in the Arab world. Even now, most of them still haven’t rushed to speak publicly, although a minority have agreed to reveal details.

The company Insights.US operates platforms that allow organizations, municipalities and governments to consult with the public and receive feedback. It has worked over the past six months with the government in Dubai to implement its system. “They read a publication from New York University that explicitly mentioned Insights as Israeli. They contacted us via our website. We understood it was from Dubai and moved to our German team,” recalls Dr. Gal Alon, the company’s founder. “It was a kind of ‘don’t ask, don’t tell’ arrangement, not to raise the issue, even though an Israeli with a thick accent participated in one of the conference calls.”

Fishing boats in front of oil tankers on the Persian Gulf waters, south of the Strait of Hormuz, offshore the town of Ras Al Khaimah in United Arab Emirates, January 19, 2012.Credit: AP

He says they were exposed to a decision-making culture at the highest level. “They are open to digitization and innovation,” he says. “They are ready to pay for good service, but they also don’t want to be suckers and know how to shop around.”

The startup Monday, which sells project management software, has no local office in the UAE, but works with a number of partners who handle its sales processes, implementation and marketing for customers in the region. Cloud Concept, Monday’s senior partner in the Emirates, built a team of 10 salespeople who recently held an annual event to present the Israeli company’s platform.

Redis Labs, a startup that provides a database management system, also sells to the Emirates but doesn’t physically operate there. CEO Ofer Bengal says his clients include most of the big banks in Dubai and a number of communications companies, which the company sells to through its American subsidiary. “I expect that after the peace agreement is signed, we will be able to expand the partnerships,” he says. “The market in Dubai offers a huge opportunity to Israeli high-tech companies, and I hope we’ll be able to exploit it.” Another start up with several large customers in the UAE is JFrog, which develops tools for automation of software updates.

NSO’s first client

In the field of cybersecurity, there seems to be more openness and readiness to reveal the existence of activity in the Emirates – and there is great demand for these products there. Cloud security firm Cato Networks, founded by Shlomo Kramer, maintains and operates a server farm in Dubai. According to the company, the server farm has operated over a year, serving Cato’s customers who have branches and factories in Dubai and elsewhere in the region.

Cybersecurity firm Check Point openly lists its Dubai office on its website. The company has employed people there for over a decade, with the office serving the Gulf states. Its clients, like elsewhere, are mainly government and financial bodies and large companies. CyberArk has similar operations.

The stand of Israel cyber-warfare NSO Group Technologies at the annual European Police Congress in Berlin, Germany, February 4, 2020.Credit: Hannibal Hanschke/ REUTERS

Cybereason, another cybersecurity company, opened a branch in Dubai last year and employs a number of locals through its American parent company. “There is a unique need in the Emirates for cybersecurity products for geopolitical reasons,” a source there says.

In the realm of cyberattacks, the UAE was NSO’s first clients, and the firm has widespread operations there. It was reported in 2018 that the Emirates used Israeli spyware to monitor regime opponents both at home and abroad, including members of the Qatari royal family.

High-tech instead of real estate

Attorney Yuval Sasson, a partner in the law firm Meitar, agreed to discuss an emerging joint platform between the two countries. “In recent days, I have been involved in establishing a joint Emirati-Israeli body that will look for different ventures here, both for investment and for distribution and sales of Israeli products from various fields, with an emphasis on coronavirus-related technologies,” he says.

The Gulf states’ investments in high-tech have grown continually in recent years because of the understanding that oil won’t sustain their economies indefinitely, both because this resource is limited and because the world is gradually transitioning to renewable energies.

Damac towers are under construction in the Business Bay district of Dubai, United Arab Emirates, Tuesday, February 11, 2020.Credit: Kamran Jebreili/AP

The UAE decided to invest $250 million in high-tech startups, according to a statement by the World Economic Forum in 2019. $150 million of that went to Hub71, a governmental venture capital firm. Emirati magnates will gladly welcome the opportunity for new investments, given the decline in real estate and in the local economy.

Some of the areas that are likely to interest Emirati investors include cybersecurity and cyberattacks, smart cities, energy-related technologies, water and exact agriculture. These investors are also active in public technology investments. According to a report by Saxo Bank, most of the trading by Emirati investors between April and June was in shares of Microsoft, Apple, Tesla, Amazon and Facebook.

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