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Company: PortAuthority Technologies (formerly Vidius)

HQ: Palo Alto, CA (formerly Ra’anana, Israel)

Founded: 2000

Management: PortAuthority’s president and CEO is Pete Foley, who was recently installed after its latest investment round in June 2005, switching over from entrepreneur-in-residence at investing firm Sequoia Capital. In one fell swoop, Foley changed the name of the company, moved its headquarters from Israel to Silicon Valley, and brought in new management, including PortAuthority’s vice president of sales, Dan Phelan, and its vice president of marketing, Raj Dhingra. Previously, Foley was chairman of the security firm Infoblox.

Investors: PortAuthority recently raised $13.4 million in Series C from prestigious VC firms Greylock Partners and Sequoia Capital.

Business Model: PortAuthority sells content-monitoring software that sits on servers within a company as well as agents dispersed throughout the company’s network. The software prevents information leaks of confidential files, such as executive memos, financials, and intellectual property. The product works with Microsoft Exchange and Lotus Notes as well as dozens of other file formats. It might seem simple enough to block flagged documents before they leave a server. But it’s not that easy. The challenge is detecting content that has been manipulated, reformatted, retyped, or cut-and-pasted into separate files. Instead of requiring that each document be manually fingerprinted, PortAuthority’s software scans documents for unique data structures. It’s certainly a hot market – given both a greater awareness of internal security leaks and new government regulations.

What’s more, just as many security breaches originate inside organizations as outside them, according to a CSI/FBI computer crime and security survey in 2004. There have also been some very high-profile breaches of private customer information caused by human error. For instance, this year in Palm Beach County, HIV information was emailed to unauthorized recipients. And confidential Apple Computer Inc. product information was leaked and posted on Web blogs. On top of that, the Sarbanes-Oxley regulations mandate information protection.

Competitors: Computer Associates, Reconnex, Tablus, Verdasys, Vericept, and Vontu

Dirt: Because so much is at stake with information leaks and so few companies have the expertise to prevent them, those who can do the job are able to demand high licensing fees. PortAuthority charges $20,000 – and that’s for software alone. It does not sell human-operated monitoring services. The company claims that it can get a client up and running in just two days, because its software does not require a lot of client customization. Competitor Vericept is the leader in this market, with more than 1.7 million users monitored at 160 companies. PortAuthority has just 22 clients now, but claims it can prevent information leakage better in real time – before the horses are out of the barn.

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Tagged: Computing

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