From: Silicon Valley Business Journal
Cromwell Schubarth
Bob Ackerman, founder of Palo Alto-based Allegis Capital, believes that by the end of this year cyber attacks will be the greatest external threat to the U.S. economy.
That is why his firm, which manages about $550 million in funds, took part in this week’s $20 million funding of stealthy Web security startup Shape Security, and has backed others that have developed tools aimed at cyber security including Solera Networks, Symplified, Bracket Computing and IronPort Systems which was acquired by Cisco Systems for $830 million in 2007.
The following are excerpts of a conversation I had with him about his prediction and the recent investment.
Q. What are the cyber threats to the U.S. economy?
A. There are three elements to the cyber threat. There are state actors who are motivated by the desire for intellectual property and state agendas. There is organized crime whose motivation is financial, primarily targeting money but also looking at intellectual property. And then you have the hactivists who are politically motivated. It is one of the greatest threats to the U.S. economy.
Q. What is the financial scope of the problem?
A. Symantec estimated that the global cost of cyber attacks in 2011 was $338 billion dollars in direct financial loss and the cost of remediating attacks. That number doesn’t include the threat to intellectual property which probably dwarves that number. The potential collective cyber threat to the U.S. economy is measured to be north of a trillion dollars. That is a significant threat to the U.S. economy from external sources.
Q. Are we prepared for that?
A. The infrastructure that we have today is based on technology that been around for 40 years. When that infrastructure was created it was never envisioned that we would have the levels of interconnectivity that we have today nor the speeds that information can move from place to place to place to place. As this technology becomes more pervasive in our economy we find that we are more and more exposed. Today you can build an aircraft carrier or disable a financial system with a cyber attack.
Q. Give me some examples.
A. There were photos published last fall of the new Chinese stealth fighter that looked eerily similar to our F35. There’s been a lot of discussion of state actors breaking into defense contractors but also commercial actors stealing intellectual property. That does two things. It allows them to significantly advance their development program and to do it at a fraction of the cost.
Also witness what the Iranians have been doing with denial of service attacks focused on banks. The ability to steal is one thing but the ability to disrupt economically and hamper critical infrastructure in the U.S. is a bigger threat.
This is no longer a Washington, D.C., problem of how do we secure our bases and defense from penetration. This is affecting Main Street and millions of bank accounts of individuals and small businesses.
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