Liquid Machines CEO Foresees Enterprise Rights Movement

Liquid Machines, a Lexington, Mass.-based enterprise rights management software provider, named Michael Ruffolo its new president and CEO in September. Besides being a die-hard Red Sox fan, Ruffolo formerly was COO of Internet caching service provider Akamai as well as vice president of sales and services at EMC, a division president at Xerox and CIO at NCR. As part of an effort to create products for securing documents in IT environments grappling with compliance issues, Liquid Machines this fall acquired Omniva Policy Systems, a provider of policy management tools for e-mail systems. In an interview with Editor In Chief Michael Vizard, Ruffolo explains why the emerging need for enterprise rights management software will balloon into the next billion-dollar market.

CRN: What's the problem that Liquid Machines is trying to solve?

RUFFOLO: When you're sharing information outside your firewall, it's very critical that you feel secure about doing it. Unfortunately, people then tend to get very paranoid about sharing information. What we want to do is give them what we call the freedom of security. All that really means is you should feel secure about sharing information that you want to share with people. We want our technology to enable that sharing. What we do is enable information that's contained within documents to be shared electronically between individuals and enterprises in a way where there's no disruption to the user behavior. We allow the IT organization to essentially set up rights for different kinds of documents to be shared appropriately, [i.e.] only with the individuals or organizations you want, and to limit the ability [to share] as appropriate to print, forward, cut and paste. The most innovative part of the technology is that the software is like a private security guard that stays with the document or the piece of the document regardless of whether it's within your enterprise or outside your enterprise.

CRN: How do the rights get assigned?

RUFFOLO: We take a policy management approach. For example, if you have a list of key executives and you have specific roles for those individuals, you can then have a standard policy that defines who has access to which documents.

CRN: What role does the channel play in Liquid Machines' go-to-market strategy?

RUFFOLO: This is like any technology that's coming to market. It's very important that we have a strong ecosystem of partners. The go-to-market strategy is focused on some key industries. The two primary ones are financial services and high-tech. The channel strategy from a reselling perspective is really around bundling our solutions with other people's products. You can imagine OEM agreements coming as a result of this technology, and then there will be other types of traditional VARs once the product gets lined up with a particular vertical. We've actually begun the channel development activities in earnest, so this is a near-term objective of ours.

CRN: What's the plan behind Liquid Machines' acquisition of Omniva?

RUFFOLO: They bring the same kinds of benefits of being able to safely and securely assign rights to e-mail traffic as we do, and we can link that with our document and application traffic. Now we have the most comprehensive solution in the marketplace. That's a big deal for us, because while the enterprise buyer thinks it's great that we can secure communication of documents, a lot of our interenterprise communication is by e-mail. So we would have an incomplete product without having that ability.

CRN: What's Liquid Machines' relationship with Microsoft, which dominates the application and e-mail spaces?

RUFFOLO: Microsoft is a very strategic partner of ours because of our complementary relationship. They helped us build awareness and legitimize the rights management environment in the area of the enterprise. Everyone knew about digital rights management for media, but enterprise rights management is a watershed event. We also believe our position of being neutral is very critical. Microsoft realizes that they need partners like us for both Microsoft and non-Microsoft documents, and [the company] is embracing us very aggressively.

CRN: How does your background as a CIO come into play in your new role at Liquid Machines?

RUFFOLO: I think it's extremely relevant in the sense of being a buyer and an implementer of technology. You certainly have a whole different empathy for how you actually sell technology. Selling and implementing are very different skills. And in this particular case, the more important part of my CIO experience is that I know the problem that Liquid Machines is solving is a huge problem for major enterprises.

CRN: So when you pull into the parking lot every morning, what's on your mind?

RUFFOLO: I think our senior management team goes to work everyday believing that we can build the next great tech company in New England, just like EMC and Akamai have been great success stories. All of us are very passionate about building a great company and essentially dominating a space that today is pretty nascent but we think will be very important going forward. It's not any more complicated than that for me.