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Palisade Systems is banking big-time on data loss prevention, one of the fastest-growing segments of the security market, and the upstart security software maker is betting that the channel will make it a winning move.
Kurt Shedenhelm, who took the CEO reins at Palisade in March 2004, decided to change the Ames, Iowa-based company's course that fall after a venture capitalist pointed out that its technology was ready-made for preventing critical data from leaving a network. "At that point, there wasn't a market called data loss prevention," Shedenhelm said.
Palisade launched its first data loss prevention product in October 2005 and beefed it up last July. Now the company has modules that cover a range of data loss compliance solutions, including for the payment card industry (credit- and debit-card information), HIPAA (confidential patient information) and Graham Leach Bliley (corporate financial information). And in December, Palisade launched the PacketSure Appliance, which provides a single solution for auditing, blocking, encrypting and preventing sensitive data from being sent outside the network.
With an ever-increasing number of companies revealing breaches in payment card, patient and customer information, Shedenhelm expects Palisade's sales to double this year to $8 million. He also expects the company, which this year made a significant investment to build up its channel ranks, to break-even by midyear.
"This is a gold mine," Shedenhelm said of the data loss prevention space. "This is a huge market opportunity over the next five years, with double-digit growth."
Palisade has a several-year head start on larger rivals, which are acquiring companies to get into the data loss prevention game, according to Shedenhelm. He said Palisade's solution is deeper and more comprehensive than rival products, which are much more narrowly focused.
Palisade's patented core security technology, which monitors network traffic for internal and external breaches, was developed Dr. Doug Jacobson, a professor of computer engineering at Iowa State University, who founded Palisade 11 years ago and continues to oversee product development as CTO. The Palisade technology is even used to prevent illegal downloading of copyrighted music by college students as a result of a cross-licensing and development pact with Audible Magic, a copyright protection company that has attracted much attention from deals with the likes of MySpace.com and Sony Music.
Shedenhelm said the toughest task wasn't adapting the Palisade technology for data loss prevention but defining product requirements in a market that was just emerging. "It was so new that we didn't know what customers were going to want," he said. "We learned as we went along."
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