Development of Israel's Security Industry
Editor / Provider: a&s International | Updated: 1/28/2008 | Article type: Hot Topics
It is almost inconceivable that the security industry could have reached the heights that it enjoys today without input from Israeli companies. A&S looks at the countryˇs various strengths.
Having fought five major wars in its first four decades, Israel has built a comprehensive standing army the Israel Defense Forces (IDF) and has furnished it with an arsenal of highly advanced military hardware. Facing a shrinking market over the last two decades, the global defense industry, including the IDF, has had to cope. Israeli defense concerns have made a concerted effort to employ R&D teams in devising products for non-military markets.
Demobilized soldiers and Russian immigrants with technological know-how brought new ideas and energy. According to Arlene Marom, Director of Tech River, these immigrants had ideas that they were unable to develop in Russia. Incubators were set up to employ these immigrants, while turning technological concepts into commercial successes through a framework of support and financial aid.
The Israeli government has been a major contributor to Israel's high-tech industry. It was instrumental in backing large numbers of projects, said Marom. This helped turn ideas into marketable products. Major successes were the establishment of the Office of the Chief Scientist (OCS) of Israelˇs Ministry of Industry, Trade and Labor; the Israel Export & Int e rna t iona l Coope r a t ion Institute; and Israelˇs venture capital infrastructure.
Universities are another source of leading technologies. The Israeli government invests more than US$260 million per year in supporting research. The state has also invested heavily in English proficiency. This has had a particular benefit for the ICT industry, where English serves as the lingua franca. In addition, Israelis receive eight years of English as a second language through the end of high school.
A small economy with a relatively limited internal market, Israel can only boost economic growth by increasing exports. The Israel Export and International Cooperation Institute put non-defense and military-related security exports at $1 billion in 2005 with non-defense IT exports at double this figure. The institute also reported that the first half of 2007 saw 27.3 percent growth in industrial exports to the U.S. (not including diamonds) for a total of $4.7 billion. Of this amount, $2.64 billion was generated by the high-tech sector.
As Israel is a purveyor of securityrelated products to the world, in the course of negotiations between the Israeli government and foreign companies, agreements are made that foreign companies will purchase goods and services from Israeli sources, said Trendlines. Furthermore, the report stated that, in the U.S., large companies such as Lockheed Martin have departments that promote trade with Israel so as to ¨capture industrial cooperation credit.〃 With a substantial portion of buy-back obligations created as a result of Israeli government purchases from U.S. companies active in defense and security-related matters, these U.S. companies seek to satisfy their obligations by making or promoting purchases from Israeli companies that are active in these same markets.
Israeli companies are instrumental in the development of alarm technology. Alarm system manufacturers in Israel fully understand that these systems have become commodities due to high demand worldwide and the competitiveness of OEMs, especially in Southeast Asia, said Lior Konitzki, Director of the Aerospace, Defense and Homeland Security Division at the Israel Export and International Cooperation Institute. The fact that Israeli companies remain competitive is due largely to the knowledge that has been gathered in Israel regarding system installation. Current leaders in the sector include Electronics Line 3000, Visonic, RiscoGroup, Pima and Crow.
One emerging segment for perimeter security in Israel is software designed for perimeter protection planning and management of emergency situations within protected areas. Leading companies include 4DM, Ness TSG, Orsus and Rontal. Leaders in solutions for non-physical barriers include Hadas, Emza, SpiderTech and Magal; leaders in systems for intrusion detection that incorporate cameras and sensors are Magna, Dr. Frucht and Magal. Other notable players are Elta (Israel Aerospace Industries), El Far, Elbit and RBTech.
¨The advantage of Israeli video surveillance companies is their ability to analyze threats and to implement the right, cost-effective solution,〃 Konitzki said. ¨We have seen many cases where government and private organizations pour huge amounts into video surveillance without actual ability to use the system as an operational tool. The key word is integration and interoperability between cameras and sensors.〃 Major players are the Mer Group, Megason, KP, Orad, Video Domain, Magal and ioimage.
¨This sector is another where competition against world players is tough. The successful companies are those that embed innovative biometric solutions for the government and homeland security market. Finger-based biometrics is still the leading segment, although we are seeing a trend for behavioral and voice biometric solutions. Major players in biometrics are BioGuard, IDesia, PerSay and Rafael. When it comes to behavioral-based systems, notable are Nemesisco and SDS (Suspect Detection Systems). Synel, Orad and KP Electronic Systems lead in access control,〃 Konitzki said.
Israeli companies are successful in other areas as well. There are more Israeli companies listed on the NASDAQ than from any other country outside the U.S. Being a publicly traded company has several advantages, explained Steve Gasner, Director of the Risk Management & Analytic Services Division, Dun & Bradstreet (Israel). It opens the door to funding and new markets, while offering transparency.
The advice given by Shabtai Shoval, CEO of Suspect Detection Systems, was succinct: ¨Being a publicly traded company in the U.S. is beneficial in terms of both funding and reputation. Being a publicly traded company in the E.U. also brings funding benefits, but this is much less so in the case for companies traded outside these two foreign markets.〃
Going public on stock exchanges outside of Israel, the U.S. and the E.U. can bring exposure and acceptance from outside markets, said Dagan Sadeh, CEO of Visual Defence. Other stock exchanges, like the Nikkei, are comparable and every bit as powerful. Thus, a listing on the Nikkei can bring both increased exposure and legitimacy within important APAC markets and also to the global security market as well.
Agent Video Intelligence
The company has 50 employees, 70 percent of whom are engaged in R&D. In fact, more than 50 percent of the companyˇs budget goes to R&D. The Agent Video Intelligence (Agent Vi) system includes platform components and specific algorithms called¨detectors.〃Platform components consist of a software module called an ¨agent,〃 which performs raw processing of images as seen by each camera in the field prior to compression. This process is called ¨feature extraction.〃 The result is very low-bandwidth data (usually less than 10 kilobits per second) that is transmitted to the server for further processing.
The Agent Vi server is the brain and main component. It receives and processes data streams from up to thousands of Agent Vi-embedded video devices connected to the network. Using the IPoIP architecture, which supports low bandwidth bidirectional communication with Agent Vi-enabled units, the server performs a wide range of software preconfigured detection missions in real time.
The Agent Vi-Sentry command and control (C2) application enables users to monitor and handle events, set event detection criteria, and control various parameters. Using the Vi-Sentry, a single operator may handle, review and analyze automatically detected suspicious activity from thousands of cameras in the field. Vi-Sentry is designed to minimize amount of visual information exposed to the operator. Only suspected events or manually selected cameras are displayed.
Electronics Line 3000
Electronics Line, established in 1982, evolved from being a traditional manufacturer of security systems to an industry market leader. Over the past five years, the company has concentrated mainly on wireless systems for the growing residential market. The emphasis has shifted to user ability to control the system from inside the home and remotely via a landline, cellular, PC or PDA, while offering providers applications for streamlined operations like advanced installation, management and diagnostic tools.
The companyˇs latest product line offers advanced functionality within a sleek, ultra-modern and sophisticated design. This new solutions also feature the companyˇs newly implemented GPRS platform. This state-of-the-art platform realizes the operational benefits of both GSM and broadband communications, providing advanced functionality coupled with reliability and low operational costs. The GPRS-based solution offers innovative interactive management applications and tools for end-users and providers, while offering the latter the advantages of a scalable solution which leverages existing, advanced communication networks.
IDesia has 10 full-time employees, all in R&D. This does not include Executive Chairman Gideon Barak, who is active in marketing as well as R&D. IDesia BioDynamic Signature (BDS) technology utilizes unique and consistent features of the human heart beat, providing unprecedented anti-spoofing security based on a positive proof of life. Biometric features are captured by simply touching conductive media for just a few seconds, followed by proprietary signal analysis that provides biometric identification results. Among its many advantages over existing solutions, BDS technology is far easier to integrate into compact electronic devices and operate; it has the best performance to cost ration on the market. Most important, it almost never fails.
IDesia plans to apply its BDS technology into the whole spectrum of commercial and enterprise biometric products. Israeli company Aladdin Knowledge Systems has an agreement with IDesia to integrate BDS technology into its e-Token product. The product is a flash drive-sized device which, when plugged into the USB, provides IT security for network enterprise applications. In addition, large automobile manufacturers have also approached IDesia to use its technology in driver identification as well as car automation projects.
ioimage, a privately held company, has been at the vanguard of intelligent video applications, delivering IP cameras and encoders with powerful built-in video analytics and unique designs geared toward simplicity. ioimage created a new segment in the intelligent video market by shifting from pure software to hardware devices. In 2006, approximately 75 percent of sales were to commercial, non-government entities. The company operates globally with the majority of revenue still coming from the EMEA region, with the highestgrowing regions being the U.S. and Asia-Pacific. ioimage sells primarily through distributors and large system integrators.
Magal Security Systems
Magal Security Systems has been in the business since 1969. Revenue in 2006 reached $66.9 million, with Israel accounting for 39 percent, followed by the U.S. with 20 percent, Europe 12 percent and other countries 29 percent. Magal invests 8 percent of revenue into R&D. Magalˇs core technology is high-end physical security physical deterrents comprising intrusion detecting sensors; its major technology is taut wire. The company also produces command and control and multimedia surveillance systems. These systems can handle not only video motion detection, but also digital video recording. Serving as workstations, they can control entire sites comprising hundreds of cameras.
Magal has also acquired or adapted technologies initiated by third parties such as Technion Israel Institute of Technology in Haifa. Other technologies have come through acquisitions buried cable sensors developed by Stellar and GPS technology from Dominion Wireless.
MATE Intelligent Video
MATE Intelligent Video has a subsidiary in the U.S. and a strategic partnership in China. The company's main revenue-generating regions are North America, Europe and the Asia-Pacific. Out of MATEˇs 60 employees, 40 percent are R&D staff. MATE is a pioneer in video content analysis (VCA) with 10 years of proven experience. Its state-of-the-art VCA algorithms are developed in-house. MATEˇs core knowledge allows maximum flexibility and the ability to customize products. The companyˇs technology is based on open architecture so that it is easy to integrate with other suppliersˇ technology.
MATEˇs products include iSense, a video counting solution for people and cars. In addition, its Access Watch is a patented video analytic system designed to detect tailgating, piggybacking, counter flow and intrusion through access control doors. Installed above the entrance, the embedded DSP (digital signal processor) analyzes video in real time both from an onboard camera and from a second, external camera to achieve unprecedented detection accuracy (higher than 95 percent) and extremely low false-alarm rates.
NICE , traded on both the NASDAQ and Tel Aviv Stock Exchange, has a presence through five regional headquarters and five R&D centers across the world; it has sales channels in more than 100 countries. The company has close to 1,900 employees, with more than 450 in five worldwide R&D sites. Approximately 10 percent of the companyˇs revenue (non-GAAP 2006 revenue was $418 million) is invested in R&D.
NICE ˇ s uniqueness lies in advanced interception, mediation, monitoring and analysis of multimedia communication; its solutions operate in video, radio, telephony and IP-based communication environments, offering advanced IP-based video surveillance, real-time detection, content analysis, zero point-of-failure reliability, and enhanced command and control center management. NICE Insight from Interactions solutions are based on management and analysis of unstructured multimedia content from telephony, the Web, radio and video communications. For security markets, NICE offers next-generation video security solutions such as NiceVision Net a complete, end-to-end solution for IP video security and NiceVision ControlCenter an enhancement to its video management applications suite, including new capabilities for advanced control room management and a network-based digital video matrix.
PerSay is one of the few companies worldwide to have successfully deployed voice biometrics for commercial verification purposes. A team of 12 R&D staff members has developed PerSayˇs core technology and platform one of the largest groups to focus completely on voice biometric technology. Some 60 percent of PerSayˇs revenue is poured back into R&D.
PerSay is a Verint spinoff; this has enabled it to develop its FreeSpeech product, which offers text-independent verification capabilities that are successfully used by financial institutions in contact centers with both standard telephones and Voice over IP. The system can handle more than 200,000 voice prints and verification takes place within 10 seconds. It also provides watch list checks to detect certain speakers when they call. Another of the companyˇs best-selling items is its text-dependent speaker verification product. Vocal Password is currently being deployed by Canadaˇs Bell for 300,000 voluntary customers.
PIMA Electronic Systems
PIMA is an Israeli firm that develops and manufactures intruder a l a rm sys t ems . Today, PIMA accounts for more than 40 percent of the Israeli intruder alarm market. It sells its products to more than 50 countries. In addition, PIMA also develops and manufactures central monitoring station hardware and software and communication accessories. The company was the first to develop a display system that, in one glance, enables the installer and user to see the status of the whole system. There is no need to press anything or go to a different menu.
Synel Time and Atendance Systems
Synel Time and Attendance Systems, a public company that has been traded on the Tel Aviv Stock Exchange since 2000, has 250 employees with approximately 40 staff members in the R&D department. Some 7 percent of total revenue goes back into R&D. Synel's revenue in 2006 was $21.7 million, of which access control systems accounted for approximately 30 percent. This represents 14-percent revenue growth from 2005.
The company focuses on five main targets: utilization of technological advantages, aggressive international marketing, development of futuregeneration data collection products, supply of synergic complementary solutions and creation of HR as the main company asset. The company aims to provide a complete solution for managing and controlling employees, visitors, outsourced personnel and vehicles entering an organizationˇs premises on a daily basis. The Harmony solution comprises an extended access control module which caters to most current market needs. It also features time and attendance, job costing, project costing, HR, and payroll modules. The system reduces operational costs and eliminates need for multiple databases.
Established in 1973, Visonic is listed on the London Stock Exchange and Tel Aviv Stock Exchange. Wireless products make up 63 percent of revenue, wired 28 percent, real-time location products 6 percent and access control products roughly 3 percent. Visonicˇs main business is in security alarms (80 percent). This is followed by its safety products division (devices for detection of gases, flooding and smoke), healthcare and those from Visonic Technology subsidiaries access control and real-time location products.
Its integrated Amber health-care panel is unlike other personal emergency response systems. The fully wireless panel not only receives signals from a large variety of detectors and sensors, but also connects to the call center in the event of an emergency for two-way communication.