NEW YORK (Reuters) – Venture capital investments in cybersecurity firms hit a record high last year amid a surge in cyber crime over the last few years, according to a report released on Thursday by U.S.-based Strategic Cyber Ventures.
Total venture capital funding in the space totaled $ 5.3 billion in 2018, up 20 percent from $ 4.4 billion seen in 2017.
“We’re seeing mega-breaches happening on an extremely frequent basis,” Chris Ahern, data scientist and principal at Strategic Cyber Ventures, told Reuters on Wednesday.
“I don’t think that’s going to stop anytime soon. And investors are seeing that as an opportunity for investment.”
Cybersecurity has become the focus for governments and corporations around the world as digital crime increases.
The latest quarterly data from cybersecurity firm ThreatMetrix showed that it detected 210 million attacks in the first quarter last year, with another 151 million seen in the second quarter. Compared with 2015, cyberattacks have surged more than 100 percent, illustrating an overall heightened risk landscape over the last two years, ThreatMetrix said.
U.S. cybersecurity firms took the bulk of investments, accounting for 46 percent of investments in 2018, according to the Strategic Cyber Ventures report. Asian and European companies took 22.6 percent of global investment, up from 12.7 percent in 2014.
“We’ve seen this trend in the broader tech ecosystem as well, with many large international funds and investment outside of the U.S.,” the report said.
“Simply put, amazing and valuable technology companies are being created outside of the U.S.”
That said, Ahern sees a bit of a pullback in investments for this year. “There is still a lot of money being put to work in 2019. I do think investors are a little bit weary, there’s a bit of vendor fatigue,” he added.
Asked about the biggest cybersecurity threat in the world, Strategic Cyber Ventures co-founder and chief executive officer Hank Thomas told Reuters that he considers the People’s Liberation Army — China’s armed forces — as the largest cyber threat actor in the world.
“They’re playing the long game. They have been able to use cyber to facilitate all sorts of things beyond just information warfare,” said Thomas, who is a former U.S. army intelligence officer focused on cyber, signals intelligence, information operations, and military intelligence planning.
Strategic Cyber Ventures has a $ 100 million portfolio that includes four cybersecurity companies.
Reporting by Gertrude Chavez-Dreyfuss; Editing by Phil Berlowitz
TAIPEI (Reuters) – Washington’s decision to cut off U.S. supplies to a Chinese chip-maker spotlights mounting tensions over China’s drive to be a global player in computer chips and the ways in which Taiwan companies are helping it get there.
FILE PHOTO: Men walk past a signboard of chipmaker United Microelectronics Corp (UMC) in Hsinchu, Taiwan January 10, 2006. REUTERS/Richard Chung/File Photo
Shut out of major global semiconductor deals in recent years, China has been quietly strengthening cooperation with Taiwan chip firms by encouraging the transfer of chip-making expertise into the mainland.
Taiwan chip giant United Microelectronics Corp (UMC) (2303.TW) last week halted research and development activities with its Chinese state-backed partner Fujian Jinhua Integrated Circuit Co Ltd, following the U.S. move.
Taiwan firms such as UMC have helped supply China with a steady pipeline of chip expertise in exchange for access to the fast-growing chip market there.
China has faced a shortage of integrated circuit (IC) chips for years. In 2017, it imported $ 270 billion worth of semiconductors, more than its imports of crude oil.
At least 10 joint ventures or technology partnerships have been set up in the last few years between Chinese and Taiwanese firms, according to industry experts, luring Taiwanese talent with hefty salaries and generous perks.
“Such companies will need to also take care to ensure no patent or IP infringement is involved as the U.S. has export control means to restrict support of critical technology,” said Randy Abrams, an analyst at Credit Suisse in Taipei.
Among the most valuable cross-strait partnerships for China would be ones that strengthen its foundry services and memory chip production. Those two sectors require much-needed help from overseas firms due to the complexity of the manufacturing technologies and intense capital requirements, analysts have said.
But the technology transfer between China and self-ruled Taiwan has raised concerns amid the Sino-U.S. trade war and escalating tensions across the Taiwan Strait.
China has aggressively used “market-distorting subsidies” and “forced technology transfers” to capture traditional and emerging technology industries, Brent Christensen, the director of America’s de facto embassy in Taipei, told a business gathering in late September.
“These actions are harming the United States’ economy, Taiwan’s economy, and other economies.”
Taiwan is one of the largest exporters of IC globally and many worry the island could lose a key economic engine to its political foe.
Taiwan’s government views the island’s chipmakers’ cooperation with China cautiously and has implemented policies to ensure Taiwan’s most advanced technology is not transferred.
“When businesses go to the mainland to invest in wafer production, they must accept controls including one that requires the manufacturing technology to be a generation behind,” the economics ministry’s industrial development bureau said in a statement to Reuters.
INTELLECTUAL PROPERTY CONCERNS
Cooperation between UMC and Fujian Jinhua came under scrutiny last month, when the U.S. government put the Chinese company on a list of entities that cannot buy components, software and technology goods from U.S. firms amid allegations it stole intellectual property from U.S.-based Micron Technology. Fujian Jinhua denied the allegations.
Fujian Jinhua now faces big challenges to reach commercial high volume production as expected in 2020, industry observers say.
Last week, both UMC and Fujian Jinhua, which was only founded in 2016, were charged with conspiring to steal trade secrets from Micron in a U.S. Justice Department indictment.
“Taiwanese tech companies need to carefully re-evaluate their positions and supply chain arrangements as the tension between the two super powers escalates,” Bernstein analyst Mark Li said.
While China will need at least six years before it can catch up in chip manufacturing, according to some estimates, the scale of its chip-making abilities is already seen as a threat in other parts of the chip supply chain.
Barely 2-1/2 years after breaking ground on a 12-inch wafer plant in China, Nexchip, a joint venture between the Chinese city of Hefei and Taiwan DRAM maker Powerchip, started producing 8,000 wafers a month. Wafers are thin pieces of material, usually consisting of silicon, used to make semiconductor chips.
Nexchip’s main goal is to produce liquid crystal display driver ICs for flat-panel makers.
Using Powerchip’s resources and Taiwanese talent, which make up a quarter of its 1,200 employees, Nexchip is helping reduce China’s reliance on foreign chip suppliers.
With an aim to become “the world’s No.1 chipmaker for display drivers,” Nexchip plans to build three more 12-inch wafer plants and ramp up its monthly production to 20,000 wafers by 2019, according to a person with direct knowledge of the matter.
After visiting Nexchip late last year, researchers from Taiwan’s chip hub, Hsinchu Science Park, said progress at the Hefei plant was a “breakthrough”.
“This will likely increase Taiwan firms’ needs to invest in the China market, and it will be a test for the (Taiwan) government’s industrial policy.”
SHANGHAI (Reuters) – Chinese firms FAW Group, Dongfeng Automobile and Chongqing Changan Automobile have set up a venture to establish a ride-sharing platform, Changan said on Saturday, creating the kind of service pioneered by Uber.
“The three major car companies have joined forces to enter the field of shared travel, which provides an opportunity to transform traditional car enterprises,” a notice posted by Changan on its Wechat social media account said.
The new venture, called T3 Mobile Travel Services, would introduce partners from other industries to build the service and seek to make use of the development of driverless cars to offer safer and more efficient travel services to customers.
The three firms signed a cooperation agreement in December.
China’s ride sharing market is now dominated by Didi Chuxing, which is valued at $ 50 billion and counts Japan’s SoftBank Group as one of its major investors.
BRUSSELS (Reuters) – Large companies with significant digital revenues in the European Union could face a 3 percent tax on their turnover under a draft proposal from the European Commission seen by Reuters.
The proposal, expected to be adopted next week and still subject to changes, has been modified from an earlier draft which put the planned corporate rate between 1 and 5 percent.
The tax, if backed by EU states and lawmakers, would only apply to large firms with annual worldwide revenues above 750 million euros ($ 924 million) and annual “taxable” revenues above 50 million euros in the EU.
The tax is presented in the draft as a temporary measure that would only be implemented if no deal is found on a more comprehensive solution which would tax the digital profits of companies in the countries where they are made, rather than where the firms are headquartered as is the case now.
($ 1 = 0.8117 euros)
Reporting by Francesco Guarascio; editing by Foo Yun Chee
LONDON (Reuters) – Social media companies should face prosecution for failing to remove racist and extremist material from their websites, according to a report by an influential committee.
FILE PHOTO – A picture illustration shows a Facebook logo reflected in a person’s eye, in Zenica, March 13, 2015.REUTERS/Dado Ruvic
Prime Minister Theresa May’s ethics watchdog recommends introducing laws to shift the liability for illegal content onto social media firms and calls for them to do more to take down intimidatory content.
Social media companies currently do not have liability for the content on their sites, even when it is illegal, the report by the Committee on Standards in Public Life said.
The recommendations form part of the conclusions of an inquiry into intimidation experienced by parliamentary candidates in an election campaign this year.
“The widespread use of social media has been the most significant factor accelerating and enabling intimidatory behavior in recent years,” the report said.
“The committee is deeply concerned about the limited engagement of the social media companies in tackling these issues.”
While the report said intimidation in public life is an old problem, the scale and intensity of intimidation is now posing a threat to Britain’s democracy.
FILE PHOTO – People holding mobile phones are silhouetted against a backdrop projected with the Twitter logo in this illustration picture taken September 27, 2013. REUTERS/Kacper Pempel/Illustration/File Photo
The report found that women, ethnic minorities and lesbian, gay, bisexual and transgender political candidates are disproportionately likely to be the targets of intimidation.
The committee heard how racist, sexist, homophobic, transphobic and anti-Semitic abuse is putting off some candidates from standing for public office.
Platforms such as Twitter, YouTube and Facebook are criticized for failing to remove abusive material posted online even after they were notified.
FILE PHOTO – A 3D-printed YouTube icon is seen in front of a displayed YouTube logo in this illustration taken October 25, 2017. REUTERS/Dado Ruvic/Ilustration
The committee said it was “surprised and concerned” Google, Facebook and Twitter do not collect data on the material they take down.
“The companies’ failure to collect this data seems extraordinary given that they thrive on data collection,” the report said. “It would appear to demonstrate that they do not prioritize addressing this issue of online intimidation.”
Twitter said in a statement it has announced several updates to its platform aimed at cutting down on abusive content and it is taking action on 10 times the number of abusive accounts every day compared to the same time last year.
YouTube declined to comment, while Facebook did not immediately respond to requests for comment.
Many politicians have become more vocal about the abuse they face after Labour’s Jo Cox, a 41-year-old mother of two young children, was shot and repeatedly stabbed a week before Britain’s Brexit referendum last year.
Reporting By Andrew MacAskill; editing by Stephen Addison
(Reuters) – Over 30 technology companies including Alphabet Inc (GOOGL.O), Amazon.com Inc (AMZN.O) and Facebook Inc. (FB.O) on Friday urged a U.S. patent court to disregard drugmaker Allergan Plc’s (AGN.N) contention that its transfer of some of its patents to a Native American tribe shields them from the court’s review.
The Allergan logo is seen in this photo illustration in Singapore November 23, 2015. REUTERS/Thomas White
Two trade groups comprised of tech industry leaders argued in a joint brief submitted to the U.S. Patent Trial and Appeal Board that the board has the right to review the validity of patents covering the dry eye medicine Restasis that Allergan transferred to the Saint Regis Mohawk Tribe in a deal announced in September.
“This panel’s statutory authority to review whether the Restasis patents were properly granted as a matter of federal law does not and should not depend on the identity of the patents’ owner,” said the trade group.
Allergan is arguing the tribe’s sovereign status means the patent review board, an administrative court, has no jurisdiction over the transferred patents. The tribe agreed to exclusively license the Restasis patents back to Allergan in exchange for ongoing payments.
Many technology companies have praised the patent court, saying it is a low-cost and efficient way to cancel dubious patents used to bring abusive lawsuits. They fear that, if upheld, Allergan’s strategy could be widely adopted and used against them.
The case before the patent board stems from a challenge to the Restasis patents brought by generic drug companies led by Mylan NV (MYL.O). Generic makers had been blocked from selling their own versions of the blockbuster medicine until the patents expired in 2024.
But a federal judge in Texas already invalidated the Restasis patents in a separate proceeding, rendering Allergan’s tribal deal effectively meaningless. The company had said it did not object to federal court review of its patents but felt the administrative process was unfair.
Despite that ruling, the Patent Trial and Appeal Board is hearing arguments on whether it must accept Allergan’s tribal immunity argument.
A group of prominent law professors, including Laurence Tribe of Harvard Law School and Erwin Chemerinsky of the University of California at Berkeley, submitted a brief on Friday siding with the tribe and Allergan.
“Far from being a scheme to shield patents from review, the agreement from the Tribe’s perspective is part of its economic development plan,” the academics said. “The Allergan-Mohawk contract reflects exactly the sort of economic entrepreneurship that Congress has been urging upon tribes.”
Reporting by Jan Wolfe; Editing by Anthony Lin and Andrew Hay
SINGAPORE/BANGKOK (Reuters) – When diaper maker DSG International (Thailand) wants to know what its customers are thinking, it often turns to Lazada, an e-commerce firm majority-owned by Alibaba Group Holding (BABA.N).
FILE PHOTO: The Singapore Lazada website is seen in this illustration photo June 20, 2017. REUTERS/Thomas White/Illustration/File Photo
“From (their) data, we know mothers sometimes browse at night, so we can offer flash sales when we know customers are browsing,” says Ambrose Chan, the Thai company’s CEO.
Southeast Asia is the world’s fastest-growing internet market, home to 600 million consumers from Vietnam to Indonesia via Singapore, many of them tech- and social media-savvy. They are rapidly spending more time and money online. A Nielsen study in 2015 estimated Southeast Asia’s middle-class will hit 400 million by 2020, doubling from 2012.
Gross merchandise value of ecommerce in Southeast Asia will balloon to $ 65.5 billion by 2021, from $ 14.3 billion last year, predicts consultancy Frost & Sullivan.
Research firm Euromonitor forecasts internet retailing in Indonesia, for example, will more than double to $ 6.2 billion by 2021, and Thailand will increase 85 percent to $ 2.8 billion.
Consumer goods firms, such as Unilever (UNc.AS) and Japanese cosmetics firm Shiseido (4911.T), say the e-commerce boom allows them to push deeper into markets that can otherwise be difficult to understand and tough to penetrate due to poor retail networks and infrastructure.
“Data from Lazada has been used to position certain products where consumer preferences are different. For example, Thai customers like to buy diapers in special cartons, while Malaysians prefer multiple packs,” says Chan.
To reach more customers and get a better handle on their online behavior, consumer goods companies are forging partnerships with e-commerce firms like Lazada and fashion website Zalora.
A customer who clicked on a 50 milliliter product may instead buy a smaller 30 ml product, said Pranay Mehra, vice president, digital and e-commerce at Shiseido Asia Pacific, noting that data and online selling experience can help firms bundle offers, decide on packaging and distribution, and influence where to set up a physical presence.
“This data is very powerful and very insightful, if used properly,” Mehra added.
Unilever, whose products range from Hellmann’s mayonnaise to Dove soap, said it is seeing more demand from rural consumers in developing markets like Indonesia and Vietnam.
RedMart’s President Vikram Rupani poses at their fulfillment centre in Singapore September 22, 2017. Picture taken September 22, 2017. REUTERS/Edgar Su
“With all our e-commerce partners, we’re using data to help us find innovative solutions to unlock key barriers of high cost delivery and poor credit card penetration in remote areas,” said Anusha Babbar, e-commerce director at Unilever Southeast Asia and Australasia.
The conglomerate, which works with the likes of Singapore online grocer RedMart, Indonesia’s Blibli and Vietnam’s Tiki, said it introduced its St Ives skincare brand on Lazada after seeing a trend towards natural products and shopper search data.
DATA AND LOGISTICS
“Traditional retailers will struggle to see customer behavior,” said Lazada Thailand’s CEO, Alessandro Piscini. “We can tell if a customer is pregnant from their search behavior.”
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Lazada, he said, plans to use data science to help its merchants customize offers for specific customer groups based on age, gender and other preferences.
Zalora, which sells clothing and accessories online in markets including Singapore, Malaysia and Indonesia, said it was working on ad-hoc projects with some brands to help them understand their customers based on data.
Lazada and Zalora are among the few e-commerce platforms that operate in multiple Southeast Asian countries. But the region is becoming a new battleground as Amazon (AMZN.O) and JD.com (JD.O) make beachheads in Singapore and Thailand.
Lazada Thailand will focus on partnering with fast-moving consumer goods companies to maintain its lead, Piscini said, and is expanding its logistics footprint across a region that has poor roads, clogged cities and thousands of often remote islands.
To be sure, online still contributes a tiny portion to consumer goods companies’ sales, but some local firms are going beyond partnerships and investing in their own e-commerce capabilities.
Thailand’s top consumer goods manufacturer Saha Group (SPI.BK) (SPC.BK) has seen online sales of some of its brands rise tenfold since it began a partnership with Lazada in June, but online still represents just 1-2 percent of total sales.
Saha is using e-commerce data to customize offerings.
“We now make real-time offerings to customers. Before, promotions would be seasonal,” Chairman Boonsithi Chokwatana told Reuters.
The company, whose products include instant noodles, toothpaste and laundry detergent, is investing 2 billion baht ($ 60 million) in logistics to support its e-commerce ambitions, including a 21-storey warehouse and a big data team, he said.
Reporting by Aradhana Aravindan in SINGAPORE and Chayut Setboonsarng in BANGKOJK; Editing by Ian Geoghegan
There are plenty of companies vying for a piece of the worldwide cloud infrastructure market, but the top four — all in the U.S. — currently dominate by such a wide margin as to effectively leave their competitors in the dust.
That’s the overriding conclusion of a study released Monday by Synergy Research Group, which provides quarterly market tracking and segmentation data, including vendor revenues by segment and region.
Amazon Web Services, Microsoft, IBM, and Google collectively control more than half of the worldwide cloud infrastructure service market, Synergy found, with an overwhelming lead by AWS, which held a 31 percent share in the second quarter. Microsoft came next with 11 percent, while IBM weighed in at 8 percent, and Google came in with 5 percent.