February 17, 2000
Israeli cyber-security firms could benefit from big hack
A string of recent sabotage attacks on Web sites could mean a business boom in Israel, where some of the world's most successful Internet security companies are located.
The U.S. Federal Bureau of Investigation has launched an investigation into a series of attacks on several leading Web sites, including Yahoo!, Amazon.com, CNN.com and eBay, the Internet auction house. Some of the sites were forced to temporarily shut down because of the sabotage.
The worldwide attention to the issue of Internet security may mean more business for Israeli companies like Check Point Software, a world leader in Internet security. The company -- founded by a group of ex-army technology experts -- is now trading on the NASDAQ stock exchange at a valuation of more than $11 billion. A Check Point spokesman said none of the sites attacked last week were using the company's products.
Israel's expertise is a direct product of its army's historic focus on cutting-edge technology. Over the years, as the army adopted new computer and networking technology, securing those networks from outside intrusion was a top priority.
When the Internet started to expand, some veterans of intelligence and communications units transformed their knowledge into civilian applications and companies. Today, Israeli Internet security companies sell more than $500 million a year in network security products around the world, and Israeli security experts also play key roles in overseas companies.
Israel Mazin, former chief executive of Memco, an Israeli security company that now belongs to Computer Associates, the world's biggest business software group, said the hacker barrage could make consumers less willing to buy products on-line.
"All of these sites will now have to be more aware of security and find a way to explain to buyers that it is safe to do business," he said.
However, he added, security companies in Israel and abroad could actually benefit from the attacks, which may boost awareness of the need for comprehensive security systems and spark more corporate investments in foolproof security products.
Shimon Gruper, vice president of Internet technology at Aladdin Knowledge Systems, a Tel Aviv-based, NASDAQ-listed security company, said the method used to disable the Web sites was an "extremely primitive" technique.
It involved bombarding the Web sites with massive requests to view Web pages. This caused an overload on Web servers in the same way a telephone system would crash when hit with massive amounts of calls for the same number or area codes.
There are many theories as to how the sabotage was pulled off -- whether it came from one troublemaker who hacked into other computers, which in turn sent the massive requests to the targeted site or whether it was coordinated with other hackers.
Gruper said that although the method was primitive, the coordinated nature of the attack is worrisome.
"That is the biggest threat," he said. "This appears to be the biggest coordinated attack ever."