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Business Is Good for Internet Security Firms

June 26, 2000

Internet security businesses that assess the risk of unauthorized access and locate the routes of incursion have been doing a booming business in the wake of a string of news headlines about Web site intrusions and defacements. Requests for services have skyrocketed since January 2000, when hackers altered the Web sites of a number of central government ministries. Major computer corporations and specialized venture capital businesses have entered the market in quick succession, and older firms are reporting a two to fourfold increase over the past year in the number of diagnostic checks they make.

The High Price of Security
Internet security businesses make use of specialized software to uncover system vulnerabilities, or "security holes." They also analyze the communications records, or "logs," to determine whether unauthorized intrusions have occurred and, if so, where from. They then report to the client on the measures that need to be taken.

Hitachi, a leader in the field, reports that it carried out more than 10 such checks in March 2000, a fourfold increase over the monthly average for 1999, and that requests from government organizations have been rising particularly sharply. IBM Japan, another big name, says it received dozens of requests between January and March 2000, particularly from manufacturers, representing a twofold increase over the preceding year.

The fee for checking 10 computers ranges from 1 million (9,524 U.S. dollars at 105 yen to the dollar) to 2.5 million yen (23,810 dollars). The charge can rise as high as 5 million yen (47,619 dollars) when an exhaustive investigation is conducted into the routes by which sophisticated hackers gained access.

Diversification and Fee Reductions
The rise in the number of clients has resulted in a diversification of diagnostic services and reduction in the fees charged. In March 2000 IBM Japan, for example, began offering the option of checking only whether any unauthorized intrusions had been made into Web sites. The fee for checking a single Web site is 200,000 yen (1,905 dollars), or just 10% of what it costs to investigate an entire system. In April 2000 the security firm Secom Co. put together a special package featuring detection and monitoring services for up to six computers at a rate of 240,000 yen (2,286 dollars) per month.

NTT-ME Information Xing, an affiliate of the telecommunications giant NTT, entered the market in July 1999 and has made a strong showing since then. Global Security Experts, a venture firm specializing in Internet security operations, has seen a threefold increase in the number of checks it performed over the past year.

A further rise in unauthorized access would boost the fortunes of these companies even further, while the development of invulnerable systems would spell the end of the boom. Whatever the case, a new mode of Internet violation is sure to come along eventually, sowing the seeds for a new line of business.

Trends in JapanCopyright (c) 2000 Japan Information Network. Edited by Japan Echo Inc. based on domestic Japanese news sources. Articles presented here are offered for reference purposes and do not necessarily represent the policy or views of the Japanese Government.