Schwarz Group takes over Israeli cybersecurity specialists

Status: 11/24/2021 2:54 p.m.

The retail sector is becoming more and more the target of hacker attacks. The Schwarz Group wants to protect itself better: The owner of the discounter Lidl has taken over the majority in an Israeli IT security company.

By Lilli Hiltscher,

The number of cyber attacks on companies has increased sharply in recent years. “Since 2019, damage to German companies from blackmail incidents and the associated failure of information and production systems has increased by more than 350 percentage points,” says Sebastian Artz, an IT security expert from the Bitkom digital association.

The Schwarz Group, owner of the supermarket chains Lidl and Kaufland, wants to protect itself against this in the future. That is why the group has taken over the majority in the Israeli security service XM Cyber. As the “Handelsblatt” reports, the purchase price will be around 700 million US dollars. Neither company wanted to comment on this.

Investment in IT security is often too low

The sum seems immense, but according to Bitkom expert Artz it is definitely justifiable: “The specialty of the Schwarz Group is that its own cloud offering is to be expanded further. Protecting this growth appropriately is essential for future success essential. ” Hacker attacks have recently increased in retail, which is why IT security is extremely important for companies like Lidl.

The retail group is one of the first companies outside the technology sector to make headlines with such sums of money for IT security. Expenditure on cybersecurity is usually low: “Together with the Federal Office for Information Security, we, as an industry association, recommend that around 15 to 20 percent of IT resources be earmarked for IT security,” said Artz. “In most companies it is only seven percent.” The problem here is often that one does not see the concrete effects of a functioning protection against hacker attacks, but only what costs they cause.

In addition to the financial bottleneck, there is also a personnel problem: In most companies, the IT department has too few employees, and there is an acute problem with young people, says Artz.

IT security situation “tense to critical”

The companies are exposed to growing dangers: In its current report, the Federal Office for Information Security (BSI) describes the IT security situation as “tense to critical”. According to the ministry, cyber extortion is emerging as the biggest threat to businesses. To do this, hackers often use so-called ransomware – software that encrypts IT systems and only decrypts them again when the company pays a ransom.

All companies can be affected by this, regardless of whether they are small, medium-sized or market leaders, says Sebastian Artz: “Companies have to take this issue seriously. After all, there are more and more examples of attacked companies.” MediaMarkt and Saturn were recently attacked. It took almost two weeks for customer service to work again.

Europe’s largest retailer

The Schwarz Group is Europe’s largest retail company. The participation should now strengthen the competence in the information technology: “The XM Cyber-Team with deep technical understanding and innovative strength optimally complements our portfolio for IT security”, said Christian Müller, CEO of Schwarz IT.

XM Cyber ​​was only founded a few years ago. One of the founders in particular is known in the scene: Tamir Pardo was head of the Israeli secret service Mossad for five years. Again and again he publicly warns of the consequences of increasing digitization, which makes companies vulnerable.

Experience in the secret service

Together with Noam Erez and Boas Gorodisski, also both secret service veterans, Pardo founded XM Cyber. This is a typical career path in Israel, after all, several elite units at the Mossad are concerned with defending against cyber attacks. As a result, the veterans are well trained, and many start their own companies after their careers in the intelligence service.

XM Cyber ​​simulates attacks on the IT system of the group to be protected in order to find out how the attackers can get into the system. In this way, vulnerable areas are identified so that they can be closed. To this end, the company has developed software that continuously simulates these attacks. “The approach of finding ways into the company and closing them from the attacker’s point of view is a future-oriented, additional component with which we can protect our customers, partners and ourselves as a company,” says Christian Müller from Schwarz IT.

The previous customers of XM Cyber ​​should not be affected by the takeover. The two companies announced that the IT security company will continue to offer its product range independently under its own brand.

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