* Hackers use malware to break into student networks
* Professors says contests complement classroom work
By Andrea Shalal-Esa
HANOVER, Maryland, April 19 (Reuters) - A U.S. Air Force Academy team on Friday beat out rivals from other elite military colleges after a three-day simulated cyber "war" against hackers from the National Security Agency that is meant to teach future officers the importance of cybersecurity.
Nearly 60 government experts - sitting under a black skull and crossbones flag - worked around the clock this week to break into computer networks built by students at the Air Force, Army, Navy, Coast Guard and Merchant Marine academies. Two military graduate schools also participated.
The annual Cyber Defense Exercise (CDX), now in its 13th year, gives students real world practice in fighting off a increasing barrage of cyber attacks aimed at U.S. computer networks by China, Russia and Iran, among others.
It also allows the NSA's top cyber experts and others from military reserves, National Guard units and other agencies hone their offensive skills at a time when the Pentagon is trying to pump up its arsenal of cyber weapons.
While the students sleep or catch up on other work, some of the NSA's "Red cell" attackers use viruses, so-called "Trojan horses" and other malicious software to corrupt student-built networks or steal data - in this case, long sets of numbers dreamt up by the officials coordinating the exercise.
But the job gets tougher every year, says Raphael Mudge, an Air Force reservist who develops software and training to protect private computer networks.
"It's challenging. The students are hungry to win," said Mudge. "It forces all of us to get better."
Army General Keith Alexander, who heads both the Pentagon's Cyber Command and the NSA, stopped by to see the "red cell" hackers in action at a Lockheed Martin Corp facility near NSA headquarters on Thursday, said spokeswoman Vanee Vines.
Alexander often speaks about the need to get more young people engaged in cybersecurity given the exponential growth in the number and intensity of attacks on U.S. networks.
The Pentagon's budget for cyber operations rose sharply in the fiscal 2014 request sent to Congress, reflecting heightened concerns about an estimated $400 billion in intellectual property stolen from U.S. computer networks in recent years.
Martin Carlisle said his 28-member team fought hard for first place after a hardware failure the first day. It was their fourth win in 13 years.
"Our nation is under attack. We need to train up a new generation of leaders," he said.
Shawn Turskey, a senior NSA official, said the goal was to raise awareness among future military commanders.
"The real payoff of this program is going to be seen 10, 15 years down the road when these individuals are admirals and generals," he said.