YouSaid · the spoken record

John Doe

lines on the record: 22
first: 2022-06-28
most recent: 2022-06-28
sittings or episodes: 1
sources: podcast

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“The only add on to that I would put in is this is starting to affect every scale of business right down to small businesses and to try and make that manageable, particularly in the backdrop of a lack of cybersecurity professionals in the market. We're starting to see MSSPs start to play a bigger role in helping businesses of all scales to address the cybersecurity problem. And I think the MSSP will be important on an ongoing basis. Even companies with very sophisticated cyber security programs will lean on MSSPs to do certain parts of their cyber defense.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“And I would add to that, which I completely agree with, I would also add some of the more as you were thinking about this specifically for financial markets, you probably saw some new requirements, the ICC brought in for companies to essentially report and disclose security incidents. And I think all of those themes with what David talked about also participate to the fact that security has become way more complex than before to operate. Regulation is changing constantly. You need to constantly evolve. And that goes back to one of the themes that we've both talked about a lot, which is simplification and really helping companies actually run the security posture, which is a really important theme right now that we see a lot of investments behind. And I think, frankly, regulation and evolution of regulation is an important factor in that overall thesis.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Look, I think we're seeing government start to turn a lot of focus towards cybersecurity, and I'll use it in a more general sense here. At RSA, one of the key themes in the regulatory space has been around privacy. And we've seen these new regulations like GDPR and CCPA come out, which not only very broad, but they're also very deep and specific in terms of protecting personal information and how companies have a responsibility to protect individuals. And then on the other side of it, we're starting to see the government evolve, certainly within the government, they've adopted the NIST framework and they're using that as sort of a basis of where they're driving all of their different operating departments to drive their cybersecurity. I think we'll see that start to come into certainly critical industries and industries that are fundamental to the security of the country. So you'll see that moving into manufacturing and utility.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, unfortunately for David, I have to agree based on all the discussions I'm having with my own clients and our clients in investment banking where I do think security remains an area where a lot of VC firms, private equity, late stage growth investors really want to find a way of investing given all of the tailwinds we talked about earlier. And especially in a world where we're seeing a ton of innovation, I also think that a lot of investors are thinking through, well, what is truly going to become a platform and can be a really large critical part of the cybersecurity ecosystem in a few years compared to new technologies that are extremely valuable but maybe more of a feature that over time gets attached to a bigger platform.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“So, themes that we're focused on fall into two main categories. The first one is new security requirements that are driven by changes in the ecosystem. And these are things like cloud and SaaS, identity management, and authorization application security, DevSecOps. We also look at data security and privacy, and we are focused on the attack surface management. The other category is application of new technology into solving fundamental problems. And these are things like using AI and ML to solve existing security problems better, or things like full stack managed security service providers or MSSPs.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, absolutely. I mean, one of the things you have to do when a company becomes obvious as a new pillar in the cybersecurity world, its valuation becomes out of reach. And it's a great company, but a very difficult investment. I think that has forced us to move much earlier in the investing landscape. So we're typically coming in, even in Series B, and we're typically much later stage of the businesses, but now we're coming in at very low levels of revenue, but we're a proven team, proven technology, and aligned with parts of the market where we feel there's a strong thesis for success. So when looking at cybersecurity, we are more thematically driven and we tend to go earlier in the company's life cycle.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“It is. We've looked at hundreds of businesses last year, and I think we made two, maybe three investments that you could call cybersecurity related. So it's a really tough environment. It is very competitive. You tend to have to focus on things that you really believe have some longevity and defensibility to them.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“If you think about the investment environment more broadly, it's obviously quite challenging across the markets. And cyber is one of those areas where people are still quite excited about. So competition is intense, valuations are high. So it's a challenging investment environment, correct?”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Focused a lot on AI and ML. We've looked at that space. I think there's some really interesting technologies coming out of that. We've looked at technologies and companies that help simplify that cybersecurity stack, particularly for the low end of the market, where it's just overwhelming. You can't hire cyber professionals. There's a lack of them and you can't really keep up with the complexity of the environment. So I think that's really important. And then the other piece which we discussed earlier on is we look at new areas of the attack surface, certainly SAS, I think, has become an incredibly important space and we've been looking at a number of businesses in that space. And then you look at things like the collaboration environment. We've seen workflows move out of email into collaboration environments and collaboration environments are far more dispersed. So they're very difficult to defend. And so these are some of the spaces where we've been focusing on.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, well, look, there were over $30 billion invested in cybersecurity companies last year. So it is a very well-funded space from the investment perspective. And the challenge is there are literally thousands of businesses out there. The way we approach it is we're looking for things that have some longevity because typically valuations are quite high, even in very early stages of these businesses. So we're looking for companies that we think either address a very new space in a novel and defensible way or things that grow into being part of the security platform and in and of themselves a platform. We try to avoid better mousetraps. And it's not because better mouse traps aren't good and then there's some really valid technology developed there, but it's very hard to grow them into a large business over time because soon enough with such a dynamic environment, you'll need an even better mousetrap in the future. So that's a tough place to be.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“That is, I think, the financial model and the business model for cybersecurity companies is extremely resilient and extremely durable, which are obviously two characteristics that finance responses tend to like. And so that's the reason why I also think that from that universe of financial investors, we'll see them doing more in cybersecurity.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“And maybe to put that in numbers, we saw about $70 billion of MA volume for cybersecurity in 2021. And that number was four times what we saw in 2020. And the short answer to your question is, I would expect that that level to stay at a relatively high mark for the foreseeable future. And there's really two main reasons for that. The first one is when you think about security for large corporates, security has really become a horizontal priority that is frankly a requirement in order to do everything else their business does. And because of that importance of security for companies that has made large cloud providers really being more focused on the space and I would expect them to continue growing in organically to really acquire more protection mechanism that they can then offer to their own customers. And on the other side, you have financial sponsors, which have become very active in cybersecurity. The reason for”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“I agree with you. I think that last theme is extremely important. If you think about it, just in the US, there's something close to 2000 security vendors at RSA, which is the largest cybersecurity conference in the world. There's something like 300 new vendors. And so companies and customers of cybersecurity really need help in simplifying their security stack to actually really be able to have a security posture that works.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Of course, and it's quite interesting because as we've seen more and more sophistication come into the tools, it's still the best defense that a company can still bring to its environments is education. So we have seen a rise in various companies that are focused on”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“definitely and i would say it's a very dynamic environment today where i truly think we have entered into a new wave of innovation for cybersecurity and i would say the couple of themes that i would mention one is around cloud security we were talking about that earlier more and more data is being moved to the cloud more and more workloads are being moved to the cloud and so because of that new wave of computing you just need new ways to secure that and so there are a lot of startups today that are trying to address the problem of cloud security and the second theme i would mention is really just around bringing more protection into the software development lifecycle because if you think about it everything being built on software the easiest way to secure that software is actually to bring real-time runtime protection of that software as it's being built and so i would say those two areas are probably ones where we see a lot of investments a lot of innovation a lot of venture capital focus and david i'd be curious to get your perspective on those two”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Look, I would say that as you look at any conflict zone, there is a constant evolution of both the attacks and the defenses and the defenses are evolving. The challenge is the assets always said the attackers only have to get through once and succeed once. The defenders have to succeed 100% of the time. And that's a very uneven playing field. I think the other challenge we have is with the black market and so much money now in cyber attacks that the criminals have an increasingly sophisticated tool set that's evolving much quicker. So some of the changes that we've seen in the market is we are starting to see AI and ML technology leak into the cyber defense space to try and keep ahead of the attacks that we don't know. And then more of a support infrastructure. We're starting to see things like software supply chain security tools starting to come in that are helping downstream.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I would add on to that it's quite interesting when you look at nation states that developed a lot of cyber weapons. They don't want to use them because once you use them, you expose them and then you start to build defenses for them. So they use them fairly sparingly. One of the interesting things in the Ukraine attack was how the group Conti, one of the cybercriminal groups, helped Russia to attack the Ukraine scraping texts and infiltrating information. The interesting thing is that Conte was estimated to have 180 million dollars of revenue last year on $6 million of expenses. I mean, if we could build a business like that, we'd be doing very well. However, they also have the advantage that they do something like this and it hurts their business model because now people don't want to pay their ransomware. And so they just rebrand overnight. And so they're splintering into multiple rebranded groups who are now coming back into the market, same tools, same people.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“That's a really interesting question because if you look at where most of the attacks are coming from today, it's really not from nation states. It's from organized crime. And when you're looking at the war in Ukraine, we haven't really seen nation-state driven cyber attacks come out of Ukraine to the rest of the Western world yet. It's interesting. I was in Israel meeting with a number of my clients a month ago, and the general view was that that cyber war at the nation state level hasn't really happened yet. And look, we obviously don't know where the Ukraine war is going to head into and the further developments that we may see, but there is a scenario where Russia uses cyber warfare as a way to fend off the sanctions and any potential escalation. And frankly, I think that's the reason why there's been guidance from governments all across the Western world to have essentially all companies in a quote-unquote shields-up mentality because it may come.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I agree with David. I would say look, you have more data to protect. There's more way to access that data. And so that results in that attack surface being more vulnerable. And by the way, that's true for consumers. We live more and more of our lives in the digital world. We have more data saved in the cloud, and that just makes it more risky for us.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, the attack surface has expanded dramatically. We've moved from the data center to a very diversified set of endpoints and computing platforms. You've got mobile, you've got web, cloud, SaaS, IoT, and OT. So attacks are happening from all points where you touch a computer system these days. This has made it easier for cyber criminals as they now have more places where they can enter the system and infiltrate into the computer systems. And it's made it much, much harder for the cybersecurity professionals who are trying to defend all these points because they're no longer in one place. They're very diversified and they often don't control large parts of those systems that they now need to defend.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“And we're not only expecting to see the number of attacks increasing, but how is the environment changing in terms of the overall surface area that's vulnerable to these attacks given all the shifts we're seeing today in terms of moves to the cloud, the digital transformation, the fact that people are just working remotely more?”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT
“With economic, social, infrastructure, and government value moving into our computer systems, we expect that the cyber attacks are going to be a permanent part of our ongoing computer life. So how has it evolved? It's moved from an annoyance to now where it's really an organized business. I think a recent McKinsey study estimated that the amount of cyber related losses will move from 6 trillion last year to over 10 trillion in 2025. Now, that's over 20% Kega and that the spend to trying to fend against these attacks is going to rise to over $100 billion in 2025. So I think that cybersecurity is going to be a core part of our ongoing online presence.”
2022-06-28 · Goldman Sachs Exchanges · Cybersecurity Deals Surge Amid Rising Attacks · IDENTIFIED FROM THE TRANSCRIPT