The Israeli cybersecurity company that pioneered corporate firewalls is making deeper inroads with the auto industry.
Check Point Software Technologies Ltd., the world’s second-biggest provider of network security, is positioning itself to increase sales in the global car market as autonomous-driving technology and connected cars place greater security demands on vehicle manufacturers.
Check Point will lead a working group including Argus Cyber Security Ltd. and Valens Semiconductor Ltd. to set security standards that can be designed into the electronic architecture of vehicles. If technology the working group is looking to secure is ultimately adopted by automakers and suppliers, it could position Check Point to extend its reach in the sector beyond the cloud-to-car communication it already helps protect.
“Every cybersecurity company is looking at it, but I don’t think they’ve made many inroads yet,” Mandeep Singh, an analyst with Bloomberg Intelligence, said of Check Point’s deeper push into the car industry. “It’s a big use case, but the technology is still in its infancy.”
The working group is part of the HDBaseT Alliance, a trade group that promotes technology invented by Valens for the telecom industry and now being adapted for cars. Its main advantage is its capability to move data-rich content like video around a car’s network using a single cable, reducing cost and weight. General Motors Co. is on the board of the alliance, and Daimler AG said last year it would use HDBaseT for its infotainment, advanced driver-assistance and telematics systems.
As cars become more like computers, with millions of lines of code and multiple internet connections, their vulnerability to hackers is growing. The risk was highlighted in 2015, when security researchers showed they could hack into a Jeep and take control away from a driver on the highway. The stunt prompted Fiat Chrysler Automobiles AV to recall 1.4 million cars and trucks, the first formal safety campaign in response to a cybersecurity threat.
The Jeep recall bolstered demand for security software that can be adapted to the architecture of cars already on the road. Check Point wants to help write the security blueprint for the next generation of vehicles, said Alon Kantor, vice president of business development at the Tel Aviv-based company.
“Later on we will be able to offer products that will run on this infrastructure, but the first phase is to help with the security design,” Kantor said by phone.
Check Point reported adjusted earnings of $1.20 per share Thursday, beating the median estimate of 28 analysts surveyed by Bloomberg.
The market for automotive cybersecurity is worth less than $100 million today and will grow to $759 million by 2023, according to IHS Markit.
The industry’s growth potential has prompted companies from a range of industries to enter the fray. Harman International Industries Inc., bought by smartphone maker Samsung Electronics Co. for $8 billion last year, is one of the largest players in automotive cybersecurity, according to Colin Bird, an IHS Markit analyst. BlackBerry Ltd., whose QNX automotive software is used in more than 60 million cars, is trying to build on that foothold by offering new layers of cybersecurity protection.
Daimler and Delphi Automotive Plc also are members of the HDBaseT Alliance. While GM is on the alliance’s board, it’s still evaluating the technology, according to a spokeswoman for the group. Delphi said earlier this month it took a minority stake in Valens.
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