As US officials braced for a possible Iranian cyberattack this month following the killing of top military general Qasem Soleimani, a trio of cybersecurity companies ventured to Capitol Hill.In a closed-door briefing with Senate aides, the companies described how hacking outfits linked to Iran, criminal groups and other adversaries are growing more sophisticated — and how they could take advantage of a complex web of vulnerable US targets to sow chaos, according to several people familiar with the Jan. 16 meeting.
Some of the hypothetical scenarios could have fit into a James Bond plot. By compromising the power grid, for example, skilled attackers could try to bring down oil and gas facilities that depend on electricity, Sergio Caltagirone, vice president of threat intelligence at Dragos, told the group. The presentations by Dragos and two other companies — CrowdStrike (CRWD) and Cloudflare (NET) — highlight the way rising international tensions, increasingly capable hackers and a high-stakes election year are combining to create a perfect storm of risks for US businesses, infrastructure providers and state and local governments.
On Jan. 22, The Guardian first reported that a forensic analysis concluded the world’s richest man, Amazon CEO Jeff Bezos, may have been hacked via a WhatsApp account belonging to the Crown Prince of Saudi Arabia. And just this week, hackers employing a strain of malware that the FBI warned about in December publicly posted the data files of dozens of businesses. It’s a volatile mix that portends a very good year for the multibillion-dollar cybersecurity industry.
“We are seeing huge growth,” Caltagirone said in an interview with CNN. “We’re servicing more calls than we can handle, which is actually a problem.” Dragos has hired more than 100 additional employees in the past 18 months and is still having trouble keeping up with demand, he added.
Chaos, Inc, or When chaos is good for business
As fears of an escalating conflict between the United States and Iran rattled much of the stock market at the start of the year, multiple cybersecurity companies saw their shares jump. Joel P. Fishbein, Jr., an industry analyst at SunTrust Robinson Humphrey, upgraded his rating of one firm, FireEye (FEYE), saying in a research note that “recent events in Iran and Iraq” are likely to drive higher spending on cybersecurity in the coming months.
Information security companies were already riding high. Global spending on cybersecurity topped an estimated $120 billion last year, up 7% from the year prior, according to market research firm Gartner. That figure is expected to grow to $143 billion by 2021. And venture capital investment in cybersecurity startups hit a new high last year.
Norse later issued a press release alleging “serious errors” in Krebs’s reporting, focusing on details relating to the company’s ownership history and structure. But security experts had already long expressed doubts about Norse’s forensic analyses, questioning its research on Iran as well as the 2014 data breach affecting the entertainment giant Sony. The company’s profile has since diminished considerably; its last tweet was in 2016.
Preparing for the 2020 election
Just as cybersecurity firms can undermine their credibility by getting things wrong and appearing to get in the way of the public interest, though, many are pitching themselves as defenders of the public good. A growing number of security companies have latched onto concerns about the 2020 elections and whether they could be hacked by foreign adversaries. More than a dozen companies, including Microsoft (MSFT) and Cloudflare, have joined together to offer cybersecurity services to political campaigns of all backgrounds.
The services are provided as in-kind donations, for free, through a not-for-profit group the Federal Election Commission cleared last year. The group is led by former US national security officials, as well as former presidential campaign managers for Hillary Clinton and Mitt Romney. While it won’t make them any money directly, said Lewis, it’s a smart strategy that’ll likely mean even more growth down the road. “It’s a sweet spot,” he said. “They get both marketing value and they get to do some good.”