Israeli cyber-security firms meet potential investors and strategic partners
by Maayan Jaffe
“We’re always looking for innovative partners,” said Ed Jaehne, chief strategy officer for KeyW Corporation.
It’s for that reason that Jaehne – and about 100 other local entrepreneurs and investors – showed up on May 29 for the Maryland/Israel Development Center’s (MIDC) Cyber Security Forum. The event, which took place in the Health Sciences Building on the Campus of Howard Community College in Columbia, featured 10 Israeli start-ups innovating in the cyber-security arena, as well as a panel discussion with local and Israeli experts on the topic of strategic partnerships and lessons in penetrating the local cyber-security market.
Maryland is known for being a leader in the cyber security industry. Gov. Martin O’Malley two years ago claimed the state to be the cyber-security hub of the U.S. With Maryland and neighboring Washington, D.C., being home to the agencies that drive and protect America – National Security Agency, United States Department of Defense, the United States Social Security Administration, NASA, National Institutes of Health, the Food and Drug Administration and a handful of others – local leaders are charged everyday with defending against cyber attacks and with determining what the bad guys are planning for tomorrow.
In April, the governor traveled to Israel on an MIDC trade mission, signing strategic agreements with several companies, including some in the cyber arena. One company, Hybrid Security, was present at the event. CEO and founder Raviv Raz said he chose Maryland because “Virginia did not send its governor to Israel,” but also because of the soft landing MIDC provides for Israeli companies, the tax breaks O’Malley has made available to cyber companies in the region and the fact that Maryland is the center of government contractors. He said, “This region is a hot spot for all the new cyber innovations.”
And that’s good, because according to Fred Ferrer, “This is a hot war.”
“The enemy is different than before,” said Ferrer, director of Cyberspace at Booz Allen Hamilton during the panel discussion. “What keeps me up at night is the threat of a [cyber] terrorist attack, one that could dismantle life as we know it.”
Rami Efrati, director of the Civilian Division of the Israel National Cyber Bureau, a government agency, said in Israel, the government and the military take the cyber threat seriously. Israelis, he said, are actively working to come up with cyber solutions. He described computer infrastructure attacks as “the new battlefield” and said Israel’s plan is to move from being a start-up nation to a cyber nation.
“We are not fighting an old war,” said Efrati. “We are fighting a new war.”
Efrati said the Israeli government has already invested roughly 80 million shekels ($25 million) for cyber security research and innovation. He asked the audience to give the young Israeli entrepreneurs in the room a chance to bring their products to the U.S. He said they are visiting with “solutions that are working.”
At the event were companies like RADiFlow, a provider of secure industrial ethernet solutions for critical infrastructure applications. RADiFlow provides an innovative network design for utilities based on its ruggedized switches, which contain an integrated SCADA firewall. Also, there was Safe-T, a comprehensive enterprise strength security platform that protects data in transit both within and outside the organization.
Safe-T founder and CEO Roei Haberman said the company just completed a third round of venture capital funding in Israel, securing $5 million dollars. His plans include looking for operating partners from Maryland in the south through New York in the north. At the MIDC event, he had several one-on-one meetings set up to help make those plans come to fruition.
Some of the other companies at the event: Arorato Ltd., which created the first context-aware behavioral application firewall; Biocath, which offers the first invisible biometric authentication; and Covertix, which develops solutions to equip enterprise organizations with independent file-level surveillance and control, protecting sensitive data, inside and outside the organization.
The U.S. panel experts conveyed a message to Israelis that there is an opportunity for partnership. Leaders like Frank Baitman, CIO of the U.S. Department of Health and Human Services, said government officers are looking for solutions that protect and have low operating costs. He equated the ideal cyber protection product to Wayne Douglas Gretzky, a Canadian former professional ice hockey player and former head coach.
“Why is [Gretzky] so good? He starts with where the puck is going to be, not where it is,” said Baitman. “We can’t keep patching the network. That is not a good defense. We are looking for companies that are thinking ahead and evolving.”
MIDC board chair, Abba Poliakoff, asked the panel, which was moderated by event sponsor Matthew M. Speare, senior vice president and manager of central technology for M&T Bank, whether there was a bias in the U.S. against foreign defense products. Panelist Chris Foster of Raytheon Company said with a laugh, “You can’t buy anything with no foreign parts anymore.”
He elaborated that while on the hardware side foreign parts are generally not an issue, on the software side there is necessity to ensure a “chain of integrity.”
Ferrer said government is more ready and willing to work with companies with which it has pre-existing partnerships, and advised the Israeli companies to start first with small- and mid-size contractors and to utilize those contractors to help get their products into government use.
“Trust,” said Ferrer, “is the key word.”
The MIDC event was a starting point for those relationships.
Mujib Lodhi, CIO at Washington Suburban Sanitary Commission, said he had meetings set up with six Israeli companies that evening. With speed-dating efficiency, he hoped to learn about them and discover opportunities for partnership. Referencing the advice of the panel, he said WSSC is considered an early adapter and risk-taker and working with him could provide the Israeli start-ups a good opportunity to test the market.
Maayan Jaffe is managing editor of WJW’s sister publication, the Baltimore Jewish Times.