Traffic Taming

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Alarm:clock is a daily news site that evaluates privately-held technology startups in the areas of hardware, software, the Internet, and wireless communications. One industry overview and one company profile by alarm:clock’s editors come to Technology Review every Wednesday by special arrangement.

Screening Out Malware
Bit9's system prevents the installation of spyware, malware, and other unauthorized software across corporate networks.

Company: Bit9
HQ: Cambridge MA
Founded: 2002

Management: George Kassabgi serves as president and CEO. He previously held executive positions at Progress Software and BEA Systems. Todd Brennan is chairman, CTO, and co-founder. He sold his previous company, Okena, to Cisco in July 2003, and before that was a researcher in the Satellite Communications Division at MIT's Lincoln Laboratory. Allen Hillery co-founded Okena and Bit9 with Brennan, and now serves as quality assurance architect for the company.

Investors: Last December, Bit9 raised a $6 million Series A round of venture capital from Highland Capital Partners and Atlas Ventures. They got off the ground in July 2003 with a $2 million federal research grant from the National Institute of Standards and Technology's Advanced Technology Program.

Business Model: Bit9 keeps hackers, disgruntled employees, and anyone else from installing spyware, malware, and other unauthorized software within corporate networks. Bit9’s Parity server monitors laptops, desktops, and servers via agent software that scans for unauthorized installations across a network. The Parity server maintains a list of files that are authorized by a systems administrator, and unrecognized or suspicious files are blocked by the agent software and marked for review. According to Bit9’s recent funding announcement, the initial version of the company’s software is currently being used by “dozens” of customers.

Competitors: Bit9 faces extensive competition from other startups, including Webroot, SecureWave, and Websense, as well as established players, such as Symantec and Computer Associates.

Dirt: The security software market is crowded -- but it has always been something of a meritocracy: if you have good products, you usually get noticed. Bit9 is competing in a dynamic space, where the demand for effective products is being driven by the ingenuity of Net ne’er-do-wells. Bots, viruses, worms, and other malware, in particular, have become increasingly dangerous. Once designed merely to cause disruption, they are now capable of stealing sensitive information. As a result, corporations will spare no expense for a reliable security product.

Given its management’s previous experience in selling Okena to Cisco, we believe Bit9 is a likely acquisition candidate. This sector is known for its consolidating ways, particularly since the big players tend to buy rather than build new products.