PGP Corp. Revs Up Channel Efforts

PGP Corp. last month unveiled an agreement with Ingram Micro to distribute its PGP secure messaging and data storage software. Since then, the company's number of solution providers has doubled to 60, said Phil Dunkelberger, president and CEO of Palo Alto, Calif.-based PGP Corp.

"We've always been a channel-focused company, but we had to ramp it more quickly," he said. "Our channel focus has not only fueled our growth but [also] our reach. It's allowed us to get to vertical markets quickly."

PGP Corp. was founded last summer with the purchase of the PGP desktop and wireless encryption product lines from Network Associates. The history of PGP (Pretty Good Privacy) dates back to 1991, when the encryption technology was created by Phil Zimmermann, who formed PGP Inc. in 1996 and sold the company to Network Associates in 1997.

Zimmermann is a technical adviser for PGP Corp., which was formed by a team of executives intent on developing the PGP technology to make it cost-effective and easy for enterprises to secure messaging.

When it bought the PGP products from Network Associates, PGP Corp.'s aim was to buy an established brand and acquire a customer base, said Dunkelberger, who served as CEO of the original PGP company and as vice president of sales at Symantec. Although Network Associates didn't transition any of its channel partners to PGP Corp., the new company heard from a number of solution providers ready with purchase orders. "Literally, people were handing us business," he said.

PGP Corp. was selling direct to solution providers but realized it needed a distribution partner, Dunkelberger said.

"We've grown pretty dramatically revenuewise. It wasn't going to scale trying to be a distributor," he said. "Ingram fit the model perfectly for what we wanted."

The company's portfolio includes enterprise, desktop and mobile products. More products are slated to launch soon, but executives declined to discuss details.

"We think the market's going to explode for them," said Brent Smith, president of ANI Direct, a Dallas-based network security solution provider.

Federal privacy legislation such as HIPAA and the Gramm-Leach-Bliley Act will fuel PGP Corp.'s growth, he said.

"Several [regulations] will mandate that companies use safeguards to protect information, whether it's patient information or consumer information. A lot of things PGP does fits into that," Smith said.

HIPAA includes requirements for health-care organizations to keep electronic patient records secure and private. Gramm-Leach-Bliley has provisions for financial services firms to keep and disclose privacy policies on how they handle customers' personal data.

"The demand is growing as people are realizing there are legal and ethical requirements to protect information," Smith said.

While PGP technology was once mainly a utility used by techies, PGP Corp.'s development of the product line will make it an enterprise standard in the next five to 10 years, he said. "I would almost compare it to something as essential as antivirus," Smith added.

ANI Direct has a deep understanding of PGP technology because it was founded by former managers of the PGP business unit at Network Associates, which dissolved the unit in fall 2001.

"We turned around and said, 'Let's start our own security company,' " Smith said.

PGP Corp.'s channel executives have a good understanding of how to build a channel program, he said. "We're pleased with the communication we have with them and the things they've done to get up to speed. We're very excited to be working with them," Smith said.