Imation on Thursday said it acquired encryption and data leakage security technology developer ENCRYPTX in one of its first moves related to its strategic shift away from a declining removable storage media business into data protection and connectivity.
The acquisition of ENCRYPTX not only brings Imation technology for encrypting storage media and managing encryption and data leakage across a company, it also brings a group of top security engineers, said Keith Schwartz, director of emerging businesses and government for Oakdale, Minn.-based Imation.
Imation has been implementing ENCRYPTX technology for at least a year, Schwartz. However, it decided to make the acquisition because of Imation's decision to make data security a strategic part of its business.
"Buying and selling its technology was not strategic," he said. "We wanted to gain expertise. We believe they have some of the top engineers. We acquired 10 security encryption programmers. Those kind of people are very hard to find. I can tell you that because we looked for a long time to find this expertise."
Imation is one of the world's largest suppliers of removable storage media, and was facing the prospect of falling revenue over time as the market for such products changed. The company in February shifted its focus from low-margin storage media products to those with higher margins, and said it will invest in R&D and acquisition in four core areas including secure storage, scalable storage, wireless connectivity, and magnetic tape.
ENCRYPTX brings Imation two primary technologies. The first is encryption technology which can be encrypted on any CD, DVD, or Blu-Ray disc to automatically encrypt the data to the FIPS (Federal Information Processing Standards) 140-2 Level 1, Schwartz said.
Jason Elles, Imation's global brand manager, said that while customer interest in optical media for data storage has waned, it is picking up again thanks to self-encrypting technology.
"Customers are seeing interest in using it for HIPAA and other regulatory purposes since it can handle the data easily and at a low cost," Elles said.
The second is two software applications that help centrally manage a company's data security and prevent data leakage.
Defender Control Server lets customers control the data moving through networks with such capabilities as the ability to kill lost or stolen devices, audit what devices are doing what functions, and report on files as they are moved, deleted, or renamed.
Defender Control Client is used to manage specific devices including USB-connected storage devices. It can turn such devices on or off; allow or disallow specific devices, types, or brands; specify what files are allowed or disallowed on those devices; and encrypt the data sent to such devices, Schwartz said.
It can also specify what specific devices can and cannot do while connected to a network, Elles said. "For instance, it might allow an MP3 player plugged into a client's PC to play music, but not to record any data," he said.
ENCRYPTX has relationships with other storage vendors besides Imation. Schwartz said Imation declines to name those vendors. However, he said, all the contracts with those companies have been reassigned to Imation. The ENCRYPTX Web site lists such companies as Micron Technologies and Lexar Media as customers.
Imation declined to state the terms of the acquisition.