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The East African : January 27th 2014
34 The EastAfrican OUTLOOK JANUARY 25-31,2014 e -AF R ICAN Cyber crime gets more sophisticated The cost of equipment has fallen, allowing mo≥e attacks that ci≥cumvent mode≥n secu≥ity systems By A SPECIAL CORRESPONDENT Knowledge@Wharton B usinesses are increasingly the victims of cyber attacks. These crimes are not only costly for the companies, but can also put their very existence at risk and may provoke significant externalities for third parties. The World Federation of Ex- changes reported in July 2013 that half of the 46 exchanges it surveyed had been victims of cyber attacks in the previous year. In a 2013 Financial Times article, the Depository Trust and Clearing Corporation, which processes large securities transactions for US capital markets, described cyber crime “as arguably the top systemic threat facing global financial markets and associated infrastructure.” Cyber attacks are not limited to the financial sector. A multitude of companies of different sizes and across sectors incur losses as a result of this crime. The fact that businesses are becoming more and more tech-dependent and interconnected adds to an increased cyber crime presence. Elaborate attacks In addition, cyber criminals are more sophisticated than ever as the cost of equipment has fallen significantly in recent years, hence allowing a new generation of cyber criminals — often based in emerging countries — to develop elaborate attacks that circumvent cutting-edge cyber security systems. Matt Hart- ley, senior director at the cyber security consultancy firm iSIGHT Partners, notes that “cyber attackers are increasingly sophisticated. The pace of innovation is escalating rapidly among threat sources, helped by an acceleration in the global proliferation of cyber expertise.” Cyber warfare damages for a company can go beyond business interruptions and the destruction of strategic data. They include cyber espionage, intellectual property loss, identity and sensitive data theft, as well as the losses that affect third parties such as custom- ers. What will be the real conse- quences of the security breach ecommerce startup LivingSocial experienced in April 2013, which involved the data of more than 50 million customers? Businesses can suffer not only from direct losses, but also from indirect losses such as brand and reputation damage. Companies that are more aware of the increasing threat of cyber warfare, especially global brands and players in the banking and energy sectors, are increasing their annual budgets for cyber security and defence. The trend is to move from a reactive to a proactive approach and to adopt “intelligent security” strategies. Strategic areas Cyber security is about under- standing the cyber threats to a company and acting upon them. However, even in these best-inclass companies, cyber security often remains isolated and is rarely integrated into the company’s other strategic areas. A higher degree of cyber secu- THE RISKS Cyber espionage, intellectual property loss, identity and sensitive data theft. Losses that affect third parties such as customers. Businesses can suffer not only from direct losses, but also from indirect losses such as brand and reputation damage. A higher degree of cyber security discourages opportunist attacks, but does not offset the risk of being the victim of a targeted attack. rity discourages opportunist attacks, but does not offset the risk of being the victim of a targeted attack. Different strategies are being adopted to minimise the risk of such attacks in terms of frequency and impact. Because even those companies that invest the most in cyber security are vulnerable, it would be reasonable to expect an approach to cyber risk similar to what companies apply with respect to other risks they face: Insurance. This is not the case. Nevertheless, the economic damage resulting from cyber attacks can be as great as that of a natural disaster, and the impotence of businesses in the face of cyber criminals is similar to what they experience in the face of terrorists. Afte≥ taking PC wo≥ld, Lenovo now eyes sma≥tphones By ERIC PFANNER Special Correspondent IN THE United States, Lenovo is still best known as the Chinese company that bought IBM’s PC business in 2005. In China, it is better known as the world’s new No 1 PC maker, a force to be reckoned with in smartphones and a bellwether for the nation’s economic and technological might. The laptop maker is already the second-larg- est smartphone brand in China, after Samsung Electronics. Lenovo, which has never had modest plans, wants to build on that success and begin pushing into the US and other wealthy markets in 2014. “Our aspiration is someday to be No 1 in the mobile space,” said J. D. Howard, a Lenovo vicepresident in charge of developing the company’s smartphone business outside China. But the company must balance — some would say blend — American and Chinese cultures. It has dual headquarters, in Beijing and Morris- ville, New York. Eighteen nationalities are represented among the top 100 managers. While it has had success worldwide in PCs and with its new smartphones in China, its success in developed markets, dominated by entrenched Apple and Samsung, is anything but assured. But the company con- stantly surprises. Lenovo was founded in 1984 by Liu Chuanzhi, a computer scientist, and a group of other engineers with financing from the Chinese Academy of Sciences, a government-linked research institute that still holds an indirect stake in Lenovo. Liu, who had been sent to a rice farm to work as a labourer during the Cultural Revolution, startled the world when Lenovo bought IBM’s PC business. The IBM deal gave the upstart instant credibility and cachet because he secured the right to use the ThinkPad name, a popular brand among companies around the world. Our aspiration is someday to be No 1 in the mobile space.” J. D. Howard, Lenovo vice-president Lenovo then made other deals that gave it a presence in major markets like Germany, Brazil and Japan.By September of 2013, Lenovo had cemented its position atop the PC industry. It sold more PCs than two major American companies, Hewlett-Packard and Dell, as well as the fading Taiwan-based rivals Acer and Asus. Lenovo had secured a 16.7 per cent share of global PC shipments, according to the two market research firms that track them, Gartner and IDC. The company’s strength has always been in building durable laptops, but recently it has expanded into tablets. In January 2012, it introduced a new device under the Yoga brand that blends the features of a laptop and a tablet, including a flippable touch screen. It sells for less than $300 in the US. Moreover, the tablet runs on Android, the Google-made operating system that has been important to the success of Samsung’s smartphones and tablets. BRIEFS Kenyan Internet traffic firm finds new home The East Africa Data Centre has won a contract to host the exchange point that manages Kenya’s Internet traffic. The centre was chosen to host the Kenya Internet Exchange Point (KIXP) after a tendering process that involved seven firms. Fiona Asonga, the chief executive of Tespok, an advocacy group for Internet service providers, said KIXP needed a centre that would support its objective of being the Internet exchange point for East Africa that can guarantee connectivity, security and power supply. FAO tech project helps in drought preparedness A new World Bank study on mobile applications for the agricultural and forest sectors has recognised the Food and Agriculture Organisation’s expertise in data collection technology for drought preparedness in Uganda. Published in December 2013, the study titled ICT for Data Collection and Monitoring and Evaluation updates organisations with changing technology and appropriate channels for data collection, monitoring and evaluation. Kenya forms special unit to fight cyber crime Kenya’s is to set up a unit to fight cyber crime. The government says running the unit will cost about $23.3 million a year. Director of Public Prosecutions Keriako Tobiko, while announcing that his office had established a unit to prosecute cyber criminals, said cyber crime has crippled business and government websites and the unit will come up with better methods of dealing with the menace. “Kenya is losing Ksh2 billion ($23.3m) annually through cyber crime. In view of its rising incidence, my office has established a dedicated unit to prosecute cyber criminals.” CEOs to increase their technology budgets About 90 per cent of chief executives in Africa plan to increase investment in technology in 2014 and position it among their top three considerations. PricewaterhouseCoopers’ 16th Annual Global CEO Survey reveals that senior executives view technology as an enabler of agility and growth because it helps with risk management, skills development and retention. The survey features the input of CEOs received through more than 1,000 interviews in 68 countries and in-depth interviews with 33 CEOs from five continents.
January 20th 2014
February 3rd 2014