Your Credit Card Number Was Hacked by a Refrigerator

By 2020, estimates go as high as 75 billion connected devices across the world. With tens of new billions of devices connected in the coming decade, one of the biggest concerns is security.

Jun 7, 2014 at 8:00AM

In the following video, Motley Fool analyst Eric Bleeker talks with Cisco's (NASDAQ:CSCO) Chris White, who is a general manager of Internet of Things sales at the company. 

While the Internet of Things has potential to be a technology shift of unparalleled size, one of the major concerns is around security. If all devices are connected via an Internet connection, home appliances or even HVAC systems could be remotely controlled. In January of this year, hackers used a refrigerator as part of a large-scale cyberattack, which made headlines across the world. If security concerns lead to fewer connected factories, hospitals, and homes, it'd blunt Cisco's revenue growth in coming years. 

Chris describes the challenges around security in a world where tens of new billions of devices will be connected in the coming decade.  

A transcript follows the video. 

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Eric Bleeker: You just talked about this. Maybe to get a little bit more granular on it -- security is always interesting to me. There was a recent attack where someone had taken over, I think it was like 700,000 devices, and as part of a malevolent attack they used a refrigerator, and it made headlines everywhere.

But you look at it -- that's a very connected consumer angle. A lot of these industries you're going to have previous systems that weren't even connected to the Internet to begin with. I think a lot of people don't think about that kind of angle on it, especially with industrial Internet.

Could you talk about some of the security opportunity? How big do you think this could be in the next five years, when you're entering these whole new verticals?

Chris White: You know what, Eric? I think the most sobering one is the Target attack. Target's point-of-sale credit card system got breached because of an HVAC connection -- to your exact point. An air conditioning unit with an Internet connection that IT probably never even knew about, was where some creative hacker managed to penetrate Target's infrastructure.

I think the good news is we're talking about it. I think the reality check is, we haven't quantified it, so a lot of the security IT industry is very busy securing the IT world, and I don't think they've really even woken up to how massive the opportunity is to secure the OT side of the world.

I think it's going to be a booming market here in the very medium to short-term, because we're already seeing the IP demand in the OT side of the world being 15 times that of the IT world.

As an example, a very large manufacturing company, North American-based, has 15 major factory plants around the world. They have between 50 and 60 thousand unmanaged, unsecure ports of connectivity in every single one of those plants. You think about the security exposure and security opportunity, let alone the manufacturing benefits they can do to get into that market and help transform that infrastructure.

I think we're scratching the surface on this security conversation at the moment.

Bleeker: That's helpful. Thanks.

Eric Bleeker, CFA, owns shares of Cisco Systems. The Motley Fool recommends Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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