CALIFORNIA RSA CONFERENCE: A GOOD PLACE TO FIND FOR FUNDING SECURITY COMPANIES RED HERRING | RSA Conference: New Threats, Fresh Funding Converge: "RSA Conference: New Threats, Fresh Funding Converge

Startups and established vendors will hawk ways to stave off fresh data security threats.
February 2, 2007

By Andrea Quong

When the information security industry’s biggest confab convenes in San Francisco this Monday, the attendees won’t be talking about security guards or passwords. The mother of all data breaches—the theft last May of a Veteran Affairs employee’s laptop containing the social security numbers and personal information of 26.5 million veterans—irrevocably upped the stakes.

But that incident only highlighted for the public what many companies had already learned the hard way—security breaches are becoming scarily common. Intrusions are cropping up everywhere, from UCLA to the company that runs retail chains T.J. Maxx and Marshall’s. Businesses are scrambling to plug the holes as cyber criminals grow ever bolder and more sophisticated and the sheer number of different types of malicious software—viruses, worms, Trojans, and other afflictions—doubles on a yearly basis. “The bad guys are coming up with so many pieces of malware, they are flooding the analysis labs of security companies,” says Andrew Jaquith, a senior analyst at the Yankee Group.

The RSA Conference, to be held February 5-9 in San Francisco, is expecting 15,000 people, among them Bill Gates, Larry Ellison, and Colin Powell. More than 300 exhibitors—including dozens of startups—will be vying for attention. Information security was a $25- to $30-billion business in 2006, Gartner estimates. The software segment alone is expected to reach $9.1 billion this year, up 10.7 percent from 2006.

“Maybe you’ve locked the front door,” says conference attendee Bob Egner, vice president of product management and global marketing for Chicago-based Pointsec Mobile Technologies, which makes encryption software for mobile data. “But you didn’t think about locking the garage door, or maybe you didn’t think about the back door.”

With an estimated $1 billion a year of investment money flowing into the coffers of security startups, according to the Yankee Group, and much blue chip interest, this year could be a make or break year for many of these niche companies.

Securing the network with a firewall and antivirus software is no longer enough, industry executives say. The clutter of today’s portable media craze, everything from flash drives and PDAs to cell phones and iPods, means that it’s easier than ever for data to flow out. Protecting consumers with new authentication technologies, above and beyond the password and login, is also a priority. Not only does it protect customers, it also staves off bad press.