Israels Aerospace Industries, the nations largest aerospace and defense firm, is planning further acquisitions of companies to beef up its cybersecurity business and gain access to foreign markets, Esti Peshin, general manager of IAIs Cyber Division, said in an interview with The Times of Israel.

IAI said last week it was investing millions of dollars in two cyber companies in Holland and Hungary to expand its research and development activities. In Holland, IAI invested in Inpedio BV, a provider of cybersecurity solutions to governments and enterprises. In Hungary, IAI invested in Cytrox, which provides governments with solutions for the design, management and implementation of cyber intelligence as well as new ways to gather intelligence from end devices and cloud services.

Cyber intelligence is information that can be found about individuals and groups on the internet, social media, the dark web or the cloud. It is the ability to collect and analyze information from cyberspace for intelligence purposes, just like intelligence agencies use visual intelligence or signal intelligence.

IAI is growing its cyber intelligence capabilities through investments and possibly through mergers and acquisitions in the future, Peshin said in a phone interview. In addition, because cybersecurity is a global business, the company will be looking to acquire stakes in companies that are also global companies as these will help open doors to foreign markets.

To be able to operate well in certain countries we need to be present there in the form of a subsidiary or in actual operations, she said. So, taking into account this overall strategy, we will consider future M&As in this context, as and when we decide to pursue that.

Esti Peshin, General Manager of IAIs Cyber Division (Courtesy)

Cybersecurity has been earmarked by IAI as a strategic field and growth engine for the firm.

The cyber activities are focused on three areas: providing nations with end-to-end cybersecurity software and technologies; providing law enforcement and intelligence agencies with tools to gather cyber intelligence in a stealthy manner and make sense of the information gathered; and creating technologies that will help better protect the aviation and maritime industries, which are undergoing increased digitization.

IAIs cyber business has grown very significantly since it was set up in 2013, Peshin said. In 2016 the cyber division had sales of $100 million, still just a small fraction of IAIs total revenues of $3.6 billion.

To provide nations with end-to-end solutions, IAIs cyber division set up last year its IC3 consortium program that includes 10 of Israels top cybersecurity firms and startups, including Check Point Software Technologies Ltd., CyberArk, Verint, ClearSky and CyberX.

Their complementary areas of expertise help IAI give clients the widest possible security coverage, Peshin said. As far as I know, there are about dozen companies globally that are able to do that.

Companies globally have been investing in cyber-technologies to keep themselves and their customers safe, as cyber-criminals and nations become increasingly daring in their hacking attacks.

Israel is seen as a global leader in cybersecurity. Sixty-five new cyber startups were set up in Israel in 2016, and the nation maintained its leading position as a global center of cybersecurity innovation, a report by the nonprofit Start-Up Nation Central said.

In March, IAI said that the IC3 consortium got a contract worth tens of millions of dollars to set up a national cyber center in a country in Latin America.

IC3 is not yet providing Israel with its solutions, Peshin said, as it was established only after the Israeli government started implementing its cyber structures. We are now in contact with various organizations to do some sort of recovery on this because I believe the technologies can be significantly helpful for the Israeli government.

In its cyber intelligence activities, IAIs software helps intelligence agencies gather information focusing on IT networks, cellular phones and cloud based services in a market that is saturated with small companies that offer a wide variety of intelligence-gathering capabilities.

We are considered a strong player in this area for specialized intelligence capabilities, Peshin said. We offer a very broad range of capabilities with the ability to integrate them into a single holistic view.

Peshin served for 11 years as a deputy director of an elite technology unit in the Israeli army and took up a variety of posts in the private sector before setting up IAIs cyber activities in 2013.

An intelligent system needs to be able to gain access to information that may be readily available or hidden, needs to determine that it is important, and needs to do this in a stealthy manner, she said.

Intelligence services dont like people to know that they are collecting information about them they need to do it in a way that doesnt leave telltale signs, she said. So this is the essence of what we are doing.

The third area IAI is pursuing is that of creating cyber solutions for the aviation and the maritime industries: providing technologies to help protect airplanes, airports, sea ports and ships from cyber-attacks.

This is something we have been pursuing for the past year and a half and we are now in very advanced phases, Peshin said, adding that the company is in talks with various stakeholders and design partners to implement our solution.

She is cautious about revealing further details because of the extreme sensitivity of the matter, she said.

Illustrative: An Airbus A321 cockpit. (Ercan Karakas/GNU free/Wikipedia)

Every computer system is vulnerable to cyber-attacks; it is just a question of how persistent the attacker is, Peshin said. Today aviation systems are becoming more and more computerized. Modern planes are essentially flying data centers. A lot of work is being done to secure them to ensure that they have the lowest possible vulnerabilities to cyber-attacks. But when we are talking about computerized systems, I am of the opinion that there is no system that is immune.

And that is why specialized technologies are needed, she said. We believe that this business is going to be very very large because planes and ships are today the essence of the global economy. You need to be able to protect them, Peshin said.

Awareness is growing and regulation about the matter is starting to kick in globally, she said. IAIs avionics know-how and its cyber capacities put it in a unique position to lead in this area, she said.

I believe this will be a very important and growing business for IAI, she said. There are not many companies around the world that have both capabilities.

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Israel Aerospace turns voracious for cybersecurity acquisitions - The Times of Israel