Amir Mizroch
The world's top ten tech companies --Microsoft, Apple, Amazon, Google, Facebook, Alibaba, Intel, Oracle, Samsung and Baidu--increasingly have something in common: they're doing mission-critical work in Israel that's core to their businesses back at HQ. Let's take a look at how this trend is playing out.
Earlier this year, Microsoft hired a 34-year-old cyber-security prodigy --a hacker essentially--as its new head of R&D in Israel. The young man, a veteran of the country’s elite Unit 8200 (Israel’s version of the NSA), will be responsible for future-proofing Microsoft’s defense of its crown jewels in the cloud. Microsoft is a cloud-first company now, everything is there: Azure, Cortana, Office, even Minecraft. In other words, Microsoft’s cloud has to be an absolutely critical part of the company’s core business going forward, and the Redmond-based company is entrusting its security to a 34-year-old Israeli.
The Microsoft Outlook app. (Photo by Jaap Arriens/NurPhoto via Getty Images)
Amazon: Up until some six months ago, Amazon had only two lines of activity in Israel, one for its AWS business, and a drone R&D facility in Herzliya, just north of Tel Aviv, for its Prime Air business. Those are two pretty big lines of business for Amazon in and of themselves. But now Amazon is hiring 100 Israeli engineers and natural language processing experts to boost Alexa, its smart virtual assistant. The idea here is to significantly advance Alexa’s vocal search capabilities for Amazon’s core business: retail. Once again, we’re seeing a global company, one of the most successful firms of all time, giving Israelis the toughest, most important, mission-critical challenges: Bring Alexa to life faster and better than anyone else, including Siri, Cortana, the Google app, or Bixby.
An Amazon Alexa device. (AP Photo/Elaine Thompson)
Google several years ago bought Waze, an Israeli navigation app, in its mission to connect the online and the offline worlds. Waze gives Google so much more than just a navigation app: it gives Google vital data on people’s driving habits around the world, and it opens a new layer of business partnerships and advertising in the offline world,including carpooling. The latter gives Google some market traction against Uber. Waze should eventually be an integral part of Google’s autonomous cars business. Other parts of Alphabet, Google's parent, have recently started looking to engage with Israeli startups in AI, robotics, and material science --core areas of for Alphabet businesses.
The Waze app. Photographer: Chris Ratcliffe/Bloomberg
Facebook’s acquisitions of Israeli companies, specifically Onavo and Face.com --have significantly boosted Facebook’s core business: targeted advertising. Face.com is facial recognition and friend tagging, while Onavo does mobile analytics. The acquisitions also led to the idea of Internet.org, Facebook’s project to bring free Internet to developing countries and remote locations--the potential source of Facebook’s next several billion users. These are not sideshows to Facebook’s main business, these are the primary drivers of Facebook’s main business.
Facebook CEO Mark Zuckerberg announces Internet.org. (Photo by Arun Sharma/Hindustan Times via Getty Images)
Apple’s second largest R&D center is in Israel, and it's reportedly working on processors, chips and sensors that are increasingly important to Apple's new devices and to augmented reality technology, meaning, Apple’s future beyond the phone. Apple's 2013 acquisition of sensor company PrimeSense gave the Cupertino-based company technology in motion and depth capture, used increasingly in Apple's phones, TV, and smartwatch.
An Apple iPhone. (Photo by Thomas Trutschel/Photothek via Getty Images)
Intel, the world's largest chipmaker, has been deeply engaged with Israeli innovation for decades, but its recent acquisition of Mobileye, an advanced driver assistance company from Jerusalem, signals Intel's intent to be front and center in the coming autonomous vehicle revolution. Through Mobileye, Intel has announced it will partner with BMW, Nissan and Volkswagen on autonomous driving, opening a vast new opportunity core to Intel's business.
(L-R) Brian Krzanich, CEO of Intel, Harald Krueger, CEO of German car maker BMW and Amnon Shashua, co-founder, chairman and CTO Mobileye NV.(CHRISTOF STACHE/AFP/Getty Images)
Oracle has recently announced that it plans to enter the cloud infrastructure race, trying to claw away market share from Amazon, the runaway leader, and Microsoft, which is itself trying to play catch-up. Google's cloud is also a player, but Oracle, with a market cap of $199B, is very late to this game --a very important game as most business applications are moving to the cloud. Still, the computer giant plans to quadruple the number of its giant data-center complexes over the next two years. Oracle's announcement comes exactly one year after it opened an accelerator for cloud innovation in Israel.
American tech giants aren’t alone.
China’s Alibaba and Baidu are increasingly doing more -- and more important work -- in Israel too.
Jack Ma himself is reportedly coming to Israel to look for a technological edge. Alibaba is an ambitious company, reflecting China’s growing global confidence and ambition. Alibaba’s acquisition of Israeli Visual QR Code company VisualLead gives you a sense of how important VisualLead’s technology is to Alibaba. Here’s what Alibaba bought: the ability to turn any image, logo, profile picture, animation, or even video into an engaging visual code that connects consumers and brands seamlessly. No more friction anywhere along the value chain (nobody in China waits for the waiter to take their bill anymore).
Alibaba Executive Chairman Jack Ma. FABRICE COFFRINI/AFP/Getty Images
In Israel, Baidu is looking at companies that focus on the domains of artificial intelligence, computer vision, voice identification, cybersecurity, sensors and automotive chips, the company's corporate ventures chief told CTech.
Baidu operates China's dominant search engine. (AP Photo/Alexander F. Yuan, File)
South Korea's Samsung has quadrupled down on Israeli innovation, with two venture capital operations and two R&D facilities. Through its Israeli investment arm Samsung NEXT Tel Aviv, Samsung has invested in over 10 early-stage Israeli startups over the past two years, several in the field of AI. The Samsung Catalyst Fund, which also has an Israeli presence, invests in later stage firms. Samsung also operates two research and development centers in Israel, a camera technology center in Herzliya and a Tel Aviv-based center developing semiconductor technology --all core to Samsung's connected devices future.
Samsung has four different operations in Israel. Photographer: Jean Chung/Bloomberg
The picture that emerges is that the world's biggest tech companies are increasingly doing crucial innovation work in Israel that significantly impacts their core businesses. These are just 10 examples, but they’re probably the biggest ones. If the Big 10 tech firms are doing this in Israel, then it’s safe to assume that at least some of the other 350 multinationals currently engaging with Israeli innovation in some form or another are doing so too.
To be sure, Israel is a complicated place, but it is also undoubtedly becoming the world’s innovation accelerator, a global beta site and test hub for new ideas in everything from life sciences to autonomous vehicles.
New skyscrapers under construction in Tel Aviv, Israel, where the city skyline is rapidly changing amidst new development, on 7 January 2018. (Photo by Diego Cupolo/NurPhoto via Getty Images)
Formerly a Tech Editor at The Wall Street Journal, Amir now heads communications for Start-Up Nation Central, an NGO bringing Israeli innovation to wherever it’s needed in the world. @Amirmizroch
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