Is outsourcing cybersecurity compromising privacy?

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This newsletter is inspired by a deep analysis of Nikesh Arora, CEO of Palo Alto Networks, and his strategic approach to cybersecurity. It embodies his leadership style, forward-thinking mindset, and innovative insights. While not an exact representation, the column reflects key elements of Arora's vision for the future of cybersecurity, offering insights to guide proactive strategies and innovation.

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As we move into 2025, one of the most serious obstacles confronting both businesses and governments is cybersecurity. The public and private sectors are now under frequent, intense, and large-scale cyber assault. Protecting infrastructure that is even half sensitive has now taken on such an unfathomable cost that the downside of the converse is practically seared into our collective imagination. Why? Because these hackers don't much discriminate when it comes to targets. Everyone from the government courthouse to the corporate world is under threat, which makes the conversation about how to secure this infrastructure an urgent one for all of us.

The role private companies play in securing the national infrastructure, especially when it comes to data and communication systems, is an indispensable and ever-more-important segment of the cybersecurity battleground. We must secure our most essential assets, and the private sector is both an essential partner in that and a principal target of cyber threats. Why should we be concerned? Several pulse points have emerged that shape a concern narrative, and they can be summarized as follows: Cybersecurity is too crucial to be left to only a few private corporations working under a partnership model with the government, especially when those corporations are being asked to secure their own systems and those of their partners in the same model.

The Italian Situation and Its Global Implications

Italy's Prime Minister Meloni has stated that the country plans to explore deals with companies like SpaceX. This potential partnership is part of a growing effort among modern governments to shore up cybersecurity and figure out how to protect critical communication and telecom infrastructures. Although the specifics about what SpaceX would do for Italy are not entirely clear, deals like this reflect a pretty basic development in the modern state - looking to private sector entities with advanced technological know-how to help secure the kinds of sensitive information that, you know, should really be kept secure.

This change underscores an increasing dependence on private entities to safeguard national interests, particularly when it comes to sectors whose technological know-how is burgeoning much faster than the government's ability to keep up. SpaceX, for instance, already plays a huge part in international communications with its advanced satellite system, Starlink. The company's collaborations with the U.S. military and other governmental agencies to provide the kinds of secure communication services that only its technological leadership can really offer is a way of extending that part of its business. Still, as a partnership, it raises some significant issues about what role private businesses ought to be playing in national security.

The absence of public alternatives for the technology and services that firms like SpaceX offer is worrisome. Prime Minister Meloni made an important point when she said that while putting data protection in the hands of a private company is not ideal, the lack of protection could lead to much worse outcomes. And again, this gets at a central truth: There are very few outfits on the planet that can provide the level of security needed to protect essential national infrastructure. SpaceX's Starlink is one of them. Indeed, in offering this particular solution to a very particular problem, Italy is in essence using a secure communication service from a private, for-profit corporation.

This prompts a basic question: how can we guarantee that private companies engaged in protecting national infrastructures meet the highest standard of accountability and transparency? Government agencies must keep a watchful eye on ensuring that these partnerships do not degrade national sovereignty, infringe on personal privacy, or compromise the long-term security of sensitive data. A mingling risk in these private-public partnerships is that corporate interests might undercut national security priorities in an era when business, government, and international politics might be more entangled than ever.

The Role of the Private Sector in Cybersecurity

For a long time, the cybersecurity field was the territory of government and national security departments. However, as the digital world has become ever more interconnected, the requirement for technical skill and innovative thinking in the defense against online threats has largely fallen to private industry. The private sector, with its up-to-the-minute technology and highly trained workforce, seems to be the best bet for providing the kinds of infrastructure and solutions that can safeguard our most vital systems. Yet, despite this apparent fit, there is a serious problem with using private industry as a manpower source for our cyber defense. This problem has three main components: data privacy, transparency, and accountability.

Western governments have historically depended on public sector remedies for ensuring the safety of national infrastructure. However, the quickening pace of technological change has made a lot of these remedies outdated. The foremost developers of new technologies to protect against cyber threats have been private companies, especially in the tech and telecommunications sectors. These companies offer numerous products and services that provide many potential safeguards against cyber threats, ranging from encryption to artificial intelligence-driven threat detection systems. Consequently, the public sector has turned more and more to the private sector for enhanced cybersecurity.

This is not a new occurrence. For many years, cybersecurity solutions have been supplied by private firms - such as Cisco, IBM, and Microsoft - to both private and public sector organizations. Yet, in recent years, the role of private enterprise in national security has taken on an even greater role. The SpaceX-Italy partnership deal is just one example of a broader trend: a government increasingly relying on private enterprise for top-tier operational infrastructure security.

Yet, the private sector's role in the securing of national infrastructure raises a host of important concerns. The most pressing is data privacy. When governments entrust sensitive data to private companies, they are, in effect, exposing that data to possible misuse by the thousands of eyes on the thousands of private hands it now passes into. Even the most secure private companies in the most secure private sectors - think banking, health care, or the data centers that, in the cloud age, store and process our every digital move - are not immune to breaches that have been and can be, with good reason, expected. Yet many of the companies that are now in breach of our trust were latterly on the national security A team.

The Balancing Act: Security Versus Privacy

The increasing reliance on the private sector for national security sharpens the focus on a critical dilemma that has long occupied the cybersecurity conversation: the balancing act between privacy and security. Cyber threats are diversifying, becoming more sophisticated, and showing no signs of abating. As the online world expands, so does the number and variety of people with bad intentions. This translates into an apparently ever-growing pool of potential disasters for everyone who has anything to do with the Internet. And it presses us all ever more urgently to find ways to secure cyberspace.

Nonetheless, in the quest for security and privacy, individuals should not be overlooked. The basic principle of protecting these key areas is not just about keeping cybercriminals at bay but more so about maintaining the fundamental rights and privileges of individuals. The move toward privatizing critical infrastructure has intensified these concerns. When the private sector is involved, there is an appearance of a greater number of entities through which the data could pass. By placing such sensitive national security data into the hands of private companies, the government places trust in those corporations to uphold key privacy standards.

The European Union's latest resolution to impose penalties on its own institutions for infringing GDPR protocols serves as a timely reminder of the threats to personal data that are poorly governed. The GDPR, among the world's most rigorous laws concerning data privacy, protects individuals from having their personal data misused and exploited. Because the penalties for not following the rules are, to put it mildly, quite harsh (think large amounts of money and lots of "bad appearance" factors), the EU's latest move underscores how seriously it is taking this matter. And what is of vital national interest to the EU is now also of vital national interest to the cybersecurity conversation in the United States - because the same bad actors often target both.

The matter of data confidentiality is not confined to European states. In the U.S., firms such as Meta and LinkedIn have been hit with hefty fines for violating data privacy laws. And these fines don’t just sting on the balance sheet - they are trust-killers. Increasingly, in our data-driven world, failing to handle data appropriately can have severe consequences. Companies that are bad with data don’t just lose their reputations; they also risk being shut out of an opaquely regulated environment that is the future of the digital economy.

Ensuring data privacy is becoming progressively more important, and for a very good reason: Sensitive information is being stored and sent all over the place - internet, notepads, cards, you name it. And in almost every instance, safeguarding that information is an absolute necessity. It's a necessity for us citizens, who hand over our personal data and expect it to be safe. It's a necessity for companies, which, when you get right down to it, don't have a whole lot of critical infrastructure that's not on the internet or otherwise digitally accessible. And it must be taken seriously by governments, which aren't meant to pry into our private affairs. And in almost every instance, safeguarding that information is an absolute necessity.

Looking Ahead: The Future of Cybersecurity

The collaboration between Italy and SpaceX, along with other partnerships across the globe, marks a new epoch in cybersecurity. A growing number of governments are looking to the private sector not just as a source of public sector solutions, but as a key partner in securing the nation. They are relying on the private sector to provide the expertise and technology needed to augment the public sector and offer a layer of protection for the nation's critical cybersecurity assets.

In one way, it is technically possible for private businesses to protect key infrastructure and assist government outfit defenses against ever-more-complex cyber attacks. Quite another, though, is the increasing dependency on private suppliers for national security, with all the concerns that breeds over data privacy, transparency, and accountability. So as partnerships between private industry and the government continue to swell, it becomes all the more critical to get right the delicate balance between protecting the sensitive data we need to secure from prying eyes and the secure-path-to-safety we afford to our average citizen.

It is the responsibility of governments to make sure that the highest standards of cybersecurity and data privacy are maintained by private companies. Public trust, they must ensure, is a condition that must be maintained at all costs. They must also ensure that the rights of individuals are never compromised for the sake of "security." The digital world, with its nether regions of darkness, requires two strong allies. One is the private sector, with its vast array of economic and intellectual resources. The other is the public sector, with its legal and policymaking powers. These two must work together in a coalition.

To sum up, the public-private partnership trend in cybersecurity is remaking government national security strategies. We’re seeing significant shifts in federal and state policy. This partnership model in cybersecurity has real potential to be beneficial. Yet it also raises questions that are important and sometimes uncomfortable. These deal with the role of private companies within the partnership and the extent to which they take on responsibility for national security issues. Will securing the "public square" become part and parcel of the business of private industry? And what about our "public square" privacy when major partnerships get involved?

Stay Safe, Stay Secure.

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