Big investors see cybersecurity as opportunity

NEW YORK Wed Jul 16, 2014 1:30pm EDT

U.S. Treasury Secretary Jacob Lew listens during a panel discussion at the North American Energy Summit in the Manhattan borough of New York, June 10, 2014.   REUTERS/Adam Hunger

U.S. Treasury Secretary Jacob Lew listens during a panel discussion at the North American Energy Summit in the Manhattan borough of New York, June 10, 2014.

Credit: Reuters/Adam Hunger

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NEW YORK (Reuters) - Cyberattacks on U.S. businesses could be an opportunity for investors as companies spend money to upgrade their infrastructures, big-name money managers said on Wednesday at a conference geared to sharing potential blockbuster ideas.

Even U.S. Treasury Jacob Lew, speaking at the CNBC Institutional Investor Delivering Alpha conference, noted that such attacks are an immediate concern.

"Everyone in this room knows cyber intrusions are not some hypothetical event on the horizon," Lew said, calling them a threat to economic security.

That, in turn, means more companies will have to upgrade, adapt or otherwise evolve their systems to deal with the problem, investors said.

"Every business in the United States will have to spend more money to defend themselves," said Lee Ainslie, head of Maverick Capital. He feels that companies providing cybersecurity could grow.

Jim Breyer, the chief executive of Breyer Capital, also listed cybersecurity and messaging as among his most interesting focuses at the conference, as well.

Cybersecurity has emerged as a major policy question in recent years, with Lew mentioning the topic comes up when he speaks with foreign leaders, as well.

Major corporations have suffered a number of high-profile breaches. Retailer Target, for example, ousted Gregg Steinhafel as chairman and chief executive in May some five months after a widespread breach provoked consumer ire.

Even billionaire investor Warren Buffett – who was not present at Wednesday's conference – says he's afraid of cyber risks.

In an interview with Reuters earlier this year, Buffett said he frets about the potential for cyberattacks at Berkshire Hathaway companies, particularly those with large physical facilities such as the BNSF railroad and at utility operations.

"It's something that the CEOs of our companies worry about plenty," he said in that interview.

(Reporting by Luciana Lopez, Svea Herbst-Bayliss and Jennifer Ablan; Editing by Bernard Orr)

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Comments (1)
Scheidell wrote:
I am a serial entrepreneur in the information security space and have used the never ending news of security and privacy breaches to fund the development and patent on a security appliance.

I still believe in hardware, and there are some fine companies out there, but one place that lacks adequate funding and research is training.

Without people, processes, procedures and training all the toys in the world won’t help. Since people are not scalable and you can’t mass produce them in China, you won’t see Wall Street fund them and Silicone Valley stories on multi-billionaires running infosec training companies.

This is a shame because information security professionals have been saying for years that the human is still the weakest link in infosec.

Target had $1.6M invested in FireEye APT detection and blocking system, but even after two critical alerts that were ignored they lost 110M records and the CIO and CEO were forced to resign.

The people weren’t trained. The proper procedures and processes were not in place.

They had the latests in firewalls, SIEM’s, Anti-Virus, APT detection software and yet they did not train their people.

This isn’t a plea for more investment in ‘soft’ companies, this is a plea for executives in the ‘target’ companies to ‘invest’ in people, processes, procedures and training.

It will pay off big.

Jul 17, 2014 6:57am EDT  --  Report as abuse
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