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What Google v. China tells us about how the security market is changing January 15, 2010

Posted by jonathanpenn in cyberwar/CIP, trends & futures.
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Rather than discuss the extent of the cyber threat from China, or whether Google should effectively pull out of China by ending the censoring of search results (or why it was even in China to begin with), the most interesting and telling thing I’m seeing from all the discussion on this is the visibility of the defense contracting and intelligence consulting community, and how that visibility and even dominance is going without much comment by industry watchers and without much challenge by traditional security firms. Who is going to analyze and say with confidence whether the attack came from proxies or direct representatives of the Chinese state? It’s the defense contractors. Like the July 4 attacks targeting the US and South Korea, the traditional defense contractors — Lockheed Martin, Northop Grumman (also targeted), and Raytheon, most notably) are the go-to authorities on this, while Symantec (which was also one of the targets in the multi-pronged attack), McAfee and others are left merely to talk about how the attacks in and of themselves might fuel greater interest in their security technologies.

Traditional defense contractors (Lockheed Martin, Northop Grumman, and Raytheon, most notably…but also BAE, Boeing, and General Dynamics, among many more) have successfully expanded from military and aerospace to cyber-surveillance and from the predominantly physical security aspects of homeland security to cyber-defense. Being so well-resourced and well-connected, they are extremely powerful and effective competitors to the traditional security vendors and security services (MSS, security consulting, and security integration) players.   Some estimates for the size the cyber-defense market place it at already about one-fourth the traditional IT Security market, and growing at a far faster rate. Given this, and that it should now be extremely clear that private sector IT lies within the cyber-warfare theater of operation, we can expect a formidable battle ahead.

Tip of the Hat to Richard Stiennon for posting similar thoughts — but even more pointedly and vociferously — here at ThreatChaos.com prior to these attacks.

And if I were to comment on Google’s effective exit from China, I’d ask: What’s exactly is Google’s goal in pulling out? Given that other tech companies that don’t host email accounts of Chinese human rights activists were also targeted, pulling out of the China market won’t likely remove it from the target list in future attacks.

[This entry is cross posted to Forrester’s Security & Risk Management Blog]

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