NSO Group: More Lumens Added to the PR Spotlight

February 1, 2020

DarkCyber noted this Thomson Reuters’ story: “FBI Probes Use of Israeli Firm’s Spyware in Personal and Government Hacks.” This is an exclusive story from “sources.” The write up reports:

The FBI is investigating the role of Israeli spyware vendor NSO Group Technologies in possible hacks on American residents and companies as well as suspected intelligence gathering on governments.

Our view is that companies purpose built to serve the needs of government agencies may find themselves struggling to break through a revenue ceiling made of Level 1 bullet resistant acrylic sheet. That may be an issue. Also, some of the specialized tools may be used for extracurricular activities which may not be monitored or authorized.

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Why?

  • Developing and maintaining the efficacy of special purpose software is expensive. Think in terms of more demand for certain engineers than there are engineers. Think in terms of the time required to figure out how to perform certain tasks.
  • Investors have many, many choices of cyber security ventures in which to invest. The companies which have been around for several years may not provide the potential “lift” a funding source requires. (It doesn’t matter if these Borges-like dreams are possible. Dreams about big payoffs are just more interesting. Otherwise, a fund could buy stock in Verint.)
  • There are a finite number of really big specialized software buyers. This means that price pressure on licensing fees exists for most of the companies.
  • Numerous “me too” services are pushing down prices of specialized tools; possibly Sixgill, another firm based in Israel, with the tag line “deep, dark, and beyond.
  • There are unexpected competitors; for example, some specialized tools can be located using off the grid services located via WhatsApp groups, i2p services, or the on-again, off-again Dark Web.

A changing market with more companies facing a need to make sales may push specialized software vendors to look for other sources of revenue. And there may be some enterprise customers who could be repurposing certain systems and methods. Some software may be so useful it can punch holes in that acrylic ceiling.

Net net: What is clear that change is afoot.

Stephen E Arnold, February 1, 2020

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