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Establishing a Perimeter

Don’t mess with Texas. Or anyplace else the Internet reaches. Dallas-based DeepNines Technologies is working to secure corporate networks with edge-of-the-network software.
March 23, 2005

Name: DeepNines Technologies

HQ: Dallas, Texas

Founded: 2002

Management: Sue Dark is the founder and CEO. She has a heavy technology background; she was a member of the instrumentation development team for the Apollo 11 and 12 groups at the Massachusetts Institute of Technology’s Lincoln Laboratory. Dark also designed and developed software to test semiconductor manufacturing equipment. Jim Binder, vice president of engineering, was previously a senior engineer in the LAN access business unit at Extreme Networks and spent 11 years at 3Com.

Investors: In March 2004, the company raised $16 million. The investors include Dawntreader Ventures and Insight Venture Partners, both of New York, and EFO Holdings of Dallas.

Business Model: DeepNines makes security software called Sleuth9 that establishes a first line of defense in front of – not behind – a corporate router. By sitting at the “edge” of the network and in front of the router, the software is able to inspect data before nasty code can enter and wreak havoc. DeepNines offers an all-in-one package including firewall, intrusion prevention, anti-virus, and forensic capture and reporting features. The company currently focuses on customers in the education, government, telecommunications, energy and financial services fields.

Competitors: VSecure, Captus, IntruGuard Devices and TopLayer.

Dirt: When a Cisco Systems router security flaw was exposed in January, DeepNines pulled a shrewd publicity move, issuing a release that was widely cited in the trade press. Dan Jackson, president and COO, was all over the place with this foreboding message: “From a security standpoint, 2005 is the year that the router becomes the Achilles heel of the network. Where there’s smoke, there’s fire – meaning these won’t be the last router vulnerabilities we hear about this year.”

We’re not aware of any big security gaffes since Cisco’s January announcement, but you can put good money on the fact that malicious activity will only increase over the coming years. Ed Sim, a partner at Dawntreader Ventures and a member of the DeepNines Board of Directors, told us that Cisco routers, with lines of code numbering in the millions, are a choice target for Net ne’er-do-wells, much like the Windows operating system. Corporate anxiety should continue to bring customers in the door for DeepNines.


A Heavenly Opportunity

A lofty satellite start-up takes a shot at space – and other alarm:clock news from the land of private venture funding

We gazed to the heavens recently and wondered if investors are still crazy enough to dump money into satellite start-ups.  We came across Bermuda-based Protostar, an operating company for geostationary satellites that plans to beam direct-to-home (DTH) satellite TV and broadband Internet access in the Asia-Pacific markets. The company just raised an undisclosed Series A round of financing from New Enterprise Associates and SpaceVest, and says this funding will help it develop three satellites. Satellite start-ups always offer the promise of, well, “astronomical” returns, but they are fraught with risk. At least Protostar is increasing its odds of success by emulating an existing satellite broadcast business model and targeting a heavily-populated market.

We’re more sanguine about the odds of other companies we’ve recently examined, such as Netifice Communications and Force10 Networks.

Netifice, which just closed a $55 million round, is an ISP that sells managed Virtual Private Network (VPN) services and secure, remote access to large companies. Though the ISP market is crowded, Netifice’s steady execution and its seasoned management impress us. CEO D. Craig Young is a bona fide ringer; he was previously vice chairman and president of AT&T Canada, CEO of MetroNet, and president of Brooks Fiber.

The management team at Force10 Networks also caught our attention. This Milpitas, California-based builder of Gigabit and 10 Gigabit Ethernet switching and routing products is run by a group of former Cisco managers and engineers. The company, which has been developing its core technology since 1999, raised a mezzanine round of $74.9 million last June, so we’d expect Force10 Networks to explore an IPO soon.

Back in the less heady world of consumer technologies, Union City, California-based Orb Networks has an interesting proposition: a $10 per month service that enables users to wirelessly streams photos, music, videos, and TV to a cell phone or laptop. The idea here is that you’d be able to access all the media that sits on your computer’s hard drive no matter where you are. We appreciate Orb’s long-term vision and the premise that we’ll all have personal media hubs soon, but hope the company will find a way to eliminate the subscription model. We doubt consumers will pay for a service that is more of a convenience than a necessity.

Consumers will pay, however, for a service that reduces risks and insures credible transactions on eBay. Arlington, Virginia-based buySAFE offers a bonding service for eBay users, meaning it verifies sellers’ identities, confirms they are financially stable, and insures that transactions are completed. By posting the buySAFE Seal on their listings, sellers signal the fact they’ve passed a quality test – and that buySAFE will cover losses for a customer up to $25,000 should any be incurred by a deadbeat seller. The company also just raised $13.25 million so it can more broadly glom onto the eBay money machine.

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