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Israel's secret intel unit spawns high-tech tycoons

Sept. 9, 2013 at 11:51 AM   |   Comments

TEL AVIV, Israel, Sept. 9 (UPI) -- The Israeli military's top-secret Unit 8200, the Jewish state's equivalent of the U.S. National Security Agency, has spawned a generation of high-tech start-ups and more technology millionaires than many business schools, and these days the cyber security sector is booming.

Unit 8200 is now the Israeli military's biggest branch in manpower terms. It has grown swiftly in recent years as cyberwarfare has become one of the major security threats to military organizations and industrialized states whose vital infrastructure is vulnerable to cyberattack.

But Unit 8200 remains the most secretive of Israel's military units. Even the name of its commander is a state secret, as is its annual budget .

It has a major, highly secure base in the Negev Desert south of Tel Aviv. But little is known about its work in what's known as signals intelligence, intercepting and analyzing other forces' communications and data traffic from mobile phones chatter and emails to flight paths and electronic signals.

Unlike other branches of the Israeli military, virtually all its research and development is conducted in-house by its huge cadre of engineers, programmers and technicians.

Unit 8200 headhunts the brightest students from high schools and colleges, and there seems to be no shortage of volunteers.

So it's no surprise that many veterans of Unit 8200 -- invariably known as "eight-two hundred" -- have been behind a host of successful high-tech start-ups in the commercial sector after they leave the service.

These enterprises provide a unique contribution to Israel's high-tech sector, widely recognized as one of the most advanced in the world.

The country's high-tech exports total an estimated $25 billion a year, a quarter of Israel's exports.

The high-tech sector currently boasts 5,000 companies that employ 230,000 people and earn

Recent Israeli success in the field include the Zisapel brothers, Yehuda and Zonhar, who sold and floated a dozen companies for hundreds of millions of dollars; and Yair Cohen, a former brigadier general who once commanded Unit 8200, who heads the intelligence cyberdivision of Elbit Systems, a major defense company.

Then there's Aharon Zeevi Farkash, another former Unit 8200 chief, founder and chief executive of FST21, which employs a mix of technologies, combining hardware and software to suit specific needs that are in the hands of young men and women hardly out of their teens.

Yossi Vardi, who founded Israel's first software company in 1969, says "more high-tech millionaires have been created from 8200 than from any business school in the country."

Israeli tech firms like Nice, Converse and Check Point were all set up by Unit 8200 alumni or based on technology developed by the unit which cyber insiders say is in some cases decades ahead of the U.S. and Europe

A measure of these companies' success is that many are bought out by the titans of the field.

IBM announced in August that it's buying Trusteer, a privately owned Israeli cloud-based cybersecurity software provider whose customers include many of the largest banks in the United States and Britain.

The terms of the deal have not been disclosed. But the Financial Times reported that IBM, which will form a cybersecurity software laboratory in Israel with more than 200 researchers from both companies, is believed to be forking up $800 million-$1 billion for Trusteer.

The Israeli outfit says its equipment can identify security threats that escape more traditional security software.

Trusteer software is designed to help ensure that bank customers can safely transfer funds on mobile devices by detecting malware that can infect a smartphone, allowing the bank to prevent fraudulent transactions taking place.

"The way organizations protect data are quickly evolving," observed Trusteer's chief executive, Mickey Boodaei, who founded the firm in 2006.

"As attacks become more sophisticated, traditional approaches to securing enterprise and mobile data are no longer valid."

Unit 8200's success as an incubator for Israel's high-tech venture is likely to grow since under the military's new strategic plan it's downsizing conventional land, sea and air forces to meet the challenges of a new era of warfare with more agile, technology-oriented forces.

Farkash says 8200's alumni are so successful because its organizational ethos encourages out-of-the-box thinking.

"We're very tolerant of mistakes," he explains. "It's impossible to be creative when fear leads you."

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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