Check Point CEO warns on escalating cyberattacks

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Gil Shwed told the Globes Israel Business Conference that the level of attacks worldwide has increased and that they are much more complex and cause much more damage.

Speaking at the Globes Israel Business Conference, cybersecurity company Check Point Software Technologies Ltd. (Nasdaq: CHKP) CEO Gil Shwed said that there was an increasing number of cyberattacks worldwide, which are causing more damage than ever. Shwed was talking to "Globes" high-tech editor Assaf Gilead as part of the Game Changer sessions staged in cooperation with Playtika. Shwed is set to step down as CEO after 30 years at the helm of the company he cofounded. Shwed will become executive chairman and will be replaced as CEO by Nadav Zafrir.

What characterizes the attacks?

"There is a very wide range of attacks - many types - Iranian organizations, and before the war Hamas was very active, but today there are more organizations that are funded by Iran. In general, the level of attacks worldwide has increased and they are much more complex and cause much more damage. They used to be sporadic like gunfire, but today an integrated attack infiltrates the organization, takes over assets and creates damage.

There are attacks on top people, MKs, ministers, what is happening?

"Attacks were once sending phishing emails to millions of people and hoping that someone would bite, today they are more targeted and professional. Phishing used to be easy to identify, today the emails are written in a very professional way. They have conducted research. An expert from a US research institute supposedly contacts you, you search the Internet and find him."

I have seen sophisticated attacks that have contacted people in the name of a senior executive in the company, contacting someone, asking for help. In the end, the victim is the one who offers the help and it ends up with great damage.

"We see legislation that is expanding, regulation that dictates more fines for Israeli senior executives, that gives the National Cyber Directorate a lot of powers. Some managers think that this is a transfer of responsibility from the state to them.

"In the entire cyber world, the responsibility lies with us. Most countries do not protect, and the law enforcement authorities do not have much to do with it. In Israel, the situation is actually better, but 99% of the burden of protection is on organizations. I am against regulation in general, but it has a meaning - it reminds managers that cyberattacks are not just the responsibility of technical staff. I think the meaning of the legislation is to explain that it is a big problem, and every organization must take measures to protect themselves.

"The industry is constantly innovating, you can't sell the same product for 10-20 years, Check Point sells the same gateway, but it is in no way similar to the one it was 10-20-30 years ago. About 15 years ago, we came in with a new architecture that shifts the balance that turns the firewall into a more powerful security machine. We changed the business model so that the customer buys subscriptions and adds layers of security. Our business model is not based on selling more products, but rather that the customer buys a subscription for security services. In recent years, it has been our main revenue driver.

"It provides modular, scalable protection capabilities that come from the cloud and also protects company sites. It has completely changed our business model."

We'll see more small companies acquired by the big ones"

If we are talking about cloud cybersecurity, we have seen many acquisitions in this sector, which is the hottest in the industry.

"High-tech has always been based on mergers and acquisitions, and in the future it will be much more like this. We need consolidation in the industry. There are tons of ideas, thousands of companies, many of the ideas are good, but there is no chance that an average organization will buy dozens of solutions. Many companies also do not generate cash, and they are looking for a 'home' or an exit. We will see more small companies being acquired by large companies and integrated solutions by large companies. We have bought 10 companies in Israel in recent years, and each one adds another layer."

Your acquisitions have been relatively small. There has not been a huge merger that has shaken things up.

"Not yet, maybe there will be more. There are not many large companies in the industry. There are about 5 companies the size of Check Point. Therefore, the situation is not one of huge mergers, but of building a portfolio by each company."

You are in your final days as CEO

"I announced at the beginning of the year that I was becoming executive chairman, to concentrate more on strategy, andwas looking for a CEO to manage the company and help build a strategy. In the summer, we found the CEO, Nadav Zafrir, who was at team8. He officially started working at Check Point yesterday, and in a few weeks he will be the CEO. He has already met a lot of employees. We feel like he is a member of the family.

"I am very excited about this change. Nadav is an amazing leader, knows the industry well, the interaction between us is great and he is the right person to lead Check Point."

Your share price rose when you announced the appointment. How did you feel about that?

"I felt good. The capital market and Check Point are doing well. We floated the company 28 years ago, and the stock has risen 70-fold. I have no complaints about Wall Street. The past year has also been good.

The share price has risen 130% since the beginning of the year.

"I'm very happy. I'm very satisfied with it."

How do you transition your role? How do you let go?

"Good question, ask me in two or three months. I really don't know how it's going to be. I'm very happy with it. Since 1996, I've been asked at every conference why are you still working and when will you move on? I've had 28 years to digest this. It's right to bring new energy to the company, I trust the people very much, we've built an incredible organization, and enterprise culture and a security capability that no other organization has. I'm very happy that someone with more energy than me has come to do this today.

"We are very different people, I am much more technologically and internally focused, and he is more externally focused. Obviously, a CEO needs both, but his focus is more on go to market and customer relations. He has a network of security managers all over the world. I think that is exactly what Check Point needs now, to go out and bring the message to the world about our security capabilities.

Check Point is Israeli and has Israeli management. When you talk to senior executives around the world, what is it like?

"There is no big difference, we have always been treated as a global technology company. We do not hide that we are Israeli, and we are not ashamed of it, on the contrary. After almost 32 years, Check Point is identified as Israeli and that is good, I am proud of it. I do not think that the issue is addressed too much. Our customers buy a leading security product from a leading company. The change for the worse is that it is difficult for managers from abroad to come to Israel, but by and large there are no major obstacles.

The Globes Israel Business Conference is held in collaboration with Bank Hapoalim and The Phoenix Holdings, and is sponsored by El Al, Bezeq, Nespresso, Wolt, Dell, the Israel Medical Association, Energean, the Jewish National Fund, BlackRock, Playtika, Meta, Strauss Group, BAZAN Group, and MSCI, with the participation of Mekorot, The Port of Ashdod, and the Israel Innovation Authority.

Published by Globes, Israel business news - en.globes.co.il - on December 3, 2024.

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