Motorola Responds To Fears About Corporate Spies Fear Of Hackers, Industrial Espionage Creates Market For Data-Security Products

One of the little ironies of the online world is that even as communication in cyberspace has grown easier and faster, corporations are busily building electronic speed bumps and roadblocks to slow things down.

Why? Because corporate America, whose computer networks have huge databases and e-mail systems, believes it is under attack from hackers, competitors and former spies as never before.

It’s that fear that prompted Schaumburg, Ill.-based electronics giant Motorola Inc. to recently launch a new business unit that will produce a line of sophisticated information security products.

The new unit, Motorola Information Security Systems, has taken advanced communications security technology created for the National Security Agency, the Department of Defense and the National Aeronautics and Space Administration and re-engineered it for use by corporations.

The result is a security system filled with highly complex encryption and decryption technology, digital signatures and electronic “firewalls” - all designed to protect a company’s computer network and e-mail systems from the most masterful and persistent hackers, says Peter Browne, managing director of the unit.

“Two things have changed in the last five years that have made this kind of sophisticated security system necessary,” said Browne.

“First, computer networks are crossing organizational lines and allowing much broader communications than ever before,” he said.

The second change is the sheer rate at which critical data, such as sensitive manufacturing process and trade secret information, is being communicated around the world.

Browne created an information security system for the U.S. Air Force in the 1960s and later created similar systems for State Farm Insurance Co. and General Electric Corp.

Browne, who operated his own security consulting company before joining Motorola in 1990, says the world of corporate and economic espionage has been dramatically influenced by a disturbing byproduct of the Cold War’s end.

Former Soviet and Eastern European spies thrown out of work with the demise of communism are offering their cloak-and-dagger talents to multinational corporations, he says. And that’s creating a need for security schemes that a few years ago would have been considered overkill.

That’s why Motorola hired Browne to create a security system to protect its computer network. And that’s why, in 1994, with its own house in order, Motorola decided it had a new product on its hands and invested $500,000 to set up its newest business unit.

While multinational Fortune 500 companies are Motorola’s initial targets, the company is confident the market will expand rapidly in the next two to three years to include small and medium-size companies that have a need to protect proprietary products and processes from competitors and techno-bandits.

“We are convinced we are headed toward at least a $3 billion-a-year market,” said Browne. “Some say it may already be a $20 billion-a-year market.”

The cost of setting up a system of “electronic firewalls” is not cheap.

Motorola’s system, called Network Security Manager, can cost a minimum of $20,000 to $25,000 for a network server. Each firewall costs about $1,500. Large corporations like Motorola, with offices all over the world, need complex systems consisting of at least 12 or more firewalls - a fact that can elevate the cost of a system into the $50,000 range.

The first company to test Motorola’s system is Hewlett-Packard Co.

Alex Wat, Hewlett-Packard’s external access service manager, said if the Motorola system passes muster, H-P will be one of the easiest companies to conduct business with electronically.

“We want to expand communication with our business partners to support joint project development, outsourcing of operations and remote management of customers’ networks,” Wat said.

According to Browne, Motorola’s new system has replaced traditional passwords with a much more powerful authentication mechanism.

Browne said the Network Security Manager, currently undergoing a beta test at Hewlett-Packard, will be on the market in August.

A less expensive e-mail security product called Signet System, will be available in July for about $5,000.