Views | on Asia Asia’s lack of cyber defenses is a missed opportunity

It’s not often that we hear updates from Asia’s cybersecurity companies. That’s because there aren’t very many of them.

NEC Corp. announced on Monday it will set up a security operations center in California under its Infosec Corp. affiliate. The initiative adds to teams in Japan and Europe, allowing NEC to run a “follow the sun” operation, similar to that deployed by others in the field.

Importantly, it makes the Japanese company just that little bit more global, and helps to add Asia to the conversation on IT security providers.

If asked to name an Asian cybersecurity company, chances are Trend Micro Inc. would be the first to come to mind, and most would draw a blank at a second.

Despite playing host to a hotbed of internet breaches, hacks and espionage, Asia Pacific has just 21 firms among the Cybersecurity 500, a ranking of the world’s best companies in the industry. The list, compiled by researcher Cybersecurity Ventures, isn’t based on size or growth, but on a qualitative assessment of the hottest and most innovative.

Bessemer Venture Partners, a Silicon Valley investor with skin in the cyber game, takes a more quantitative approach and lists 29 companies in its BVP Cyber Index of publicly traded companies whose principal business is information-technology security. Even then, only two Asian companies make the gauge: Trend and NQ Mobile Inc.

But NEC isn’t just dipping its toes in the water. It bought Infosec in 2013 and started ramping up its emphasis on IT security about a year later as part of a company reorganization, listing the subject as a key focus for the coming years. Among its successes, NEC supplies biometrics technology for India’s Aadhaar citizen-identification program and a facial recognition system for South Australia’s police force.

Dig deep enough and you’ll find more examples of IT security businesses buried inside other Asian companies. There’s also a plethora of small, independent infosec teams – notably in Taiwan – that are chasing down breaches and selling consulting services to corporate and government clients that have been hacked.

Yet the lack of size, scale and specialized focus in Asia is surprising. It took a long time for Western companies to treat seriously the defensive need for cybersecurity, but once they did the business opportunities were also quickly recognized. In Israel (population: 8.3 million), the nation’s ongoing security threats have been turned into a burgeoning industry that birthed 36 of the Cybersecurity 500 companies.

Many Asian boards still have their heads buried in the sand when it comes to the attacks they face, not just from hacks but from fraud, intellectual property leakage, and physical and supply chain breaches. When they do start to face up to reality we can expect a rush of new, specialist companies to meet that need. Tim Culpan, Bloomberg