The secrets of Israeli information security innovation

In my previous piece I provided some insights on how Israel has become an information security innovation powerhouse.

In closing the topic, I’ll share some insights from Gadi Tirosh who is a managing partner at Jerusalem Venture Partners (JVP); an international venture capital firm based in Jerusalem.

I met with Tirosh as part of a delegation at the Cybertech conference in Tel Aviv in January, on a trip sponsored by the America–Israel Friendship League and the Israeli Foreign Ministry.

Information security is one of the sectors JVP specializes in and Tirosh has his finger on the pulse of the ever growing Israeli and global information security space.

He noted there are trends that are unique to Israel and others that are more common to other countries. He observed that there are four main areas which lend themselves to the growth in the Israeli information security sector:

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Academic – the academic and commercial sectors in Israel are tightly coupled. Israeli high schools and universities place a strong emphasis on STEM, including cryptography. At the university level, venture capitalists and university professors work closely. A good example of the academic/commercial integration is with Adi Shamir who is the S in RSA and a distinguished professor of applied mathematics at the Weizmann Institute of Science. Shamir was a co-founder of the Israeli video software firm NDS, which was sold to Cisco in 2012 for $5 billion.

Military – unique to Israel, outflow from technical units of the military flow into the commercial space. Contrast this regrettably with the US, where veterans face significant hurdles and challenges migrating from the military to the corporate world.

The Israeli military has identified information security as one of the more significant frontlines of general warfare and have invested heavily in those capabilities. Given the importance of information security, the military has access to the best talent coming out of the high schools.

In Israel unlike the US; military service is mandatory, and at the end of their service, these soldiers are highly qualified and released into the commercial sector. They are a great source for entrepreneurs as they have both technical as well as real-world experience the field.

Government – the Israeli government has invested heavily in the information security sector. The government has a special fund from the National Authority for Innovation that offers dedicated funds to support cyber security innovation.

Multinational investing in Israel – Firms such as Cisco, EMC, Google, Microsoft, IBM, and many more have opened cyber design centers in Israel. Many of these firms get their Israeli footprint via acquisitions of Israeli technology companies. These acquisitions provide the firms with a pool of well-trained professionals.

Just this week, Oracle CEO Safra Catz said she definitely sees more acquisitions of Israeli startups. She noted that across the world she sees a momentum for investments in Israel, whether from China or India. Problems are amassing across the world, and the genius of Israeli startups in problem solving is amazing.

Crystal ball time

With so many information security firms being created, can the Israeli high-tech sector sustain its current growth rate? With new information security risks and threats, the demand for information security products will only increase.

Tirosh sees no letdown in the amount of information security activity for at least the next decade. With the increase in new technologies, especially around cloud, mobile and IoT; all of which have security gaps and risks; and wherever there is a gap, there’s room for a startup to create a solution to fix it.