11 US Companies Ready To Benefit Most From Joe Biden's Executive Order On Cybersecurity

On May 7, a relatively unsophisticated ransomware attack shut down America's largest fuel pipeline for days, resulting in gas shortages, price spikes, and consumer panic.

This was precisely the type of scenario that cybersecurity experts had warned about for years. And, to be honest, things could have turned out even worse.

?So, what could be done to prevent such an attack? And more importantly, what was the US government's response?

Colonial pipeline attack was one of the biggest cyberattacks on critical national infrastructure in US history. In fact, the White House described the attack as a “sobering reminder that U.S. public and private sector entities increasingly face sophisticated malicious cyber activity from both nation-state actors and cybercriminals.”?

?However, the Colonial Pipeline hack is not the only example of criminal groups exploiting cyber vulnerabilities in the United States. Last year, software from the IT company SolarWinds was breached, allowing hackers to gain access to communications and data in several government agencies. Since then, the Biden administration has faced two more major cybersecurity crises, including the attack on the colonial pipeline.

?In light of these recent significant attacks targeting the US government, the Biden administration issued an Executive Order (or EO) on cybersecurity on May 8, 2021. The 18-page Executive Order calls for the federal government and private sector to work together to combat “persistent and increasingly sophisticated malicious cyber campaigns” that threaten U.S. security.?

?The order specifically calls for:

Removing Barriers to Sharing Threat Information.

The executive order specifies that all software developers doing business with the federal government make their security data public. Approximately 85 percent of America's infrastructure is privately held, posing a regulatory obstacle for the government.

Under the EO, IT service providers will now be required to notify the government of cybersecurity breaches that could affect U.S. networks, and also eliminate contractual barriers that may prevent providers from reporting breaches.?

However, it is crucial to understand that the US government requires notification of any incident involving a commercial service provider, not just those that involve US government data.

Modernizing Federal Government Cybersecurity.

The US government has been repeatedly victimized by recent incidents where cybercriminals have successfully exploited vulnerabilities within its environment. So, how can the US government strengthen its detection of these critical vulnerabilities and remediate them?

?To keep up with today's evolving cyber threat environment, the EO directs the federal government to adopt a modern approach to cybersecurity that is focused on increasing its visibility into threats while protecting civil liberties.

The Executive Order helps the federal government's transition to secure cloud services and a zero-trust architecture by enabling the implementation of multifactor authentication and encryption within a set timeframe.

?

Enhancing Software Supply Chain Security.

The software supply chain represents a critical vulnerability for all organizations, including Federal agencies. Cybercriminals frequently exploit the security programs of IT and software providers to gain access to their clients.?

These risks that organizations face have been highlighted by recent events affecting SolarWinds, Microsoft Exchange Servers, and Pulse Secure. So to fix this issue, software developers would now have to provide proof of the security of their products, along with their testing methods, any known vulnerabilities, and ongoing security procedures.

The Executive Order includes several other topics, including establishing a Cyber Safety Review Board, standardizing the federal government’s playbook for responding to cybersecurity vulnerabilities and incidents, improving detection of cybersecurity vulnerabilities and incidents on federal government networks, and improving the federal government’s investigative and remediation capabilities.

Overall, the Executive Order aims to close some critical holes in the US government's cybersecurity capabilities. The EO is largely intended to protect Federal infrastructure, but it will also have a direct effect on private sector service providers (such as software providers), who will now be required to meet additional security standards to do business with the United States government.

Under the Executive Order, software providers will develop new specifications that will be incorporated into federal contracts for commercial software and hardware to impose “more rigorous and predictable mechanisms for ensuring that products function securely, and as intended.”?

This is a massive shift that will have an immediate effect on software development processes and life cycles around the world. However, the most significant impact of this Executive Order would be on:

?- Software and firmware developers,

- Chief Product Security Officers (CPSOs),

- Occupational therapy equipment manufacturers,

- Medical device manufacturers,

- Aerospace and defense companies, and

- The U.S. Energy sector and other critical infrastructure.

Then again, the scope of US federal procurement is so broad that almost all device and software manufacturers will be directly affected. That being said, the question remains as to which company will benefit the most from this EO?

Dan Ives, Managing Director and Senior Equity Research Analyst covering the Technology sector at Wedbush Securities says, “Clearly the federal government has reached a tipping point around beefing up its cybersecurity protection in a strategic move long overdue. This move will have a crossover impact into the private sector as well and ultimately benefit the pure-play cybersecurity vendors in our opinion with new standards now in place.”?

The move to the cloud has revealed even more data and endpoints, resulting in an "eye-popping" increase in attack rates. For the next 12-18 months, the new EO will act as a wider sector growth catalyst for cybersecurity companies.?

That is why some analysts believe the Biden administration would spur further federal spending that “benefits?Beltway players like Telos and Palantir in particular.”

Telos is a leading provider of cyber, cloud, and corporate security solutions for some of the world's most secure businesses. Its customers are mainly federal government military, intelligence, and civilian agencies, as well as NATO allies around the world. Security services of Telos include wired and wireless networks for federal agencies and DoD. They also offer identity management and security consulting.??

Palantir Technologies, on the other hand, is a publicly held American software firm that specializes in big data analytics. Palantir's initial clients were USIC federal agencies, but it has since expanded its customer base to also include state and local governments, as well as financial and healthcare companies.

The services offered by both companies will lay the groundwork for their advancement as the latest executive order outlines the strengthening of federal cybersecurity standards. Apart from these, the new EO is also likely to benefit well-positioned cybersecurity vendors such as Fortinet, SailPoint, CrowdStrike, Tenable, CyberArk, Varonis, Zscaler, and Palo Alto.?

However, the EO's benefits would not be limited to only cybersecurity firms. Experts believe the executive order would provide Wedbush Securities, a privately held investment firm, with an opportunity to promote future business tech beneficiaries. This change could signal a turning point in the company’s history.

The newly issued Cybersecurity Executive Order from President Biden marks the strongest stance ever taken by the Federal government in an attempt to secure our nation’s software supply chains from attack.?

Without action and funding from Congress, it is unclear how much of an impact the EO will have, but it does lay out some groundwork. Senator Mark Warner, chairman of the Senate Select Committee on Intelligence, called the EO “a good first step.”??

Warner says, “Congress will have to step up & do more to address our cyber vulnerabilities, & I look forward to working with the administration & my colleagues on both sides of the aisle to close those gaps.”

Cybersecurity executives responded to the order with cautious optimism, with some citing the recent SolarWinds attack as an example. Jyoti Bansal, CEO of Traceable and Harness, said the administration's efforts to strengthen cybersecurity standards are encouraging.?

Bansal says, “The gravity and widespread nature of the SolarWinds attack clearly demonstrates that the impact of nation-state cyberattacks has reached a new level of risk. There is so much software development behind how government agencies operate and interact with citizens these days.”

According to Bansal, these attacks have shown that software code and all third-party vendors in the software supply chain "are and will continue to be the next main vector of attack".?

However, Bansal warned that prescriptive regulation is inadequate in itself. “We need industry leaders to adopt secure development practices and make security an unambiguous priority at all levels. Accountability is another part of the answer — the cost of security breaches should be sufficient to motivate vendors and IT professionals to make changes to proactively detect and prevent more vulnerabilities.”

This executive order, hopefully, signals a new era of cybersecurity, one in which regulators, developers, and suppliers, as well as the larger cybersecurity community, are all on the same page and sharing the same language.?

It gives security professionals the ability to act, and it allows businesses to expand their security infrastructure to meet their needs. The end result would be a more stable and cleaner national ecosystem that holds us all accountable.

So, in your opinion, do you think the US government is doing enough in terms of cybersecurity? What do you think they could be doing better to prevent such an attack that happened on the 7th of may from ever happening again?