Blackstone Group CTO William Murphy does not hide his enthusiasm over the first Israeli investment by the world's largest private equity fund - an investment in data security start-up WatchDox Ltd. in March. He told "Globes" during an interview at Blackstone's offices on Park Avenue in Manhattan, "It is going to become a billion-dollar company.
"We all agree that everything would be simpler if people were better," said Murphy. "In an ideal world, you'd leave your door open, but unfortunately, because of today's risks, you have to lock it."
"Globes": Define "lock".
Murphy: "Let's say that there is a disgruntled employee at an enterprise who says, 'I don’t like Bill. I'm going to send this document to "The New York Times" because it has unflattering material. The journalist receives the document, but thanks to WatchDox, he cannot read it. Here's another example: I am sure that you have documents from your previous workplace on your home PC, right? It's quite common. With WatchDox, every document that has ever been sent to your personal e-mail address, the moment we say, 'We don’t want you to open these documents any more,' you can't ever enter them again."
Don’t you think that this is an unwarranted invasion of an employee's privacy?
"We ask employees to only use WatchDox for enterprise documents, not personal ones, which they can do what they want with. As for Blackstone's documents, they're its intellectual property, and we have the right to know what they are doing with them."
Do you require your employees to use WatchDox?
"We don’t want to act insensitively, so we show this to all employees, but we don’t compel its use. Meanwhile, the number of users rose from 50 to 650 within six months. We're talking about more than a third of the fund's 1,600 employees, so we think that if we continue on this path of demonstration and explanation of what it can do, ultimately all or most of the employees will adopt it. In this way, we can create demand for WatchDox among our employees without making it mandatory. People here love that WatchDox's solution does not make them feel that they must use it because it is some kind of corporate bureaucratic tool that they don’t want."
But if, nonetheless, not everyone uses it voluntarily?
"Our goal is to achieve this without saying, 'You must use it', because you don’t want a feeling of bitterness among the users. They should want WatchDox because it's the right thing to do and the best tool, not because, 'Bill said to do it'. If, nonetheless, we don’t reach that point, then it will become a mandatory platform."
There is no shortage of IT security companies. What makes WatchDox special?
"None of the companies we examined before WatchDox took the issue of security so seriously. WatchDox installs the security within the document itself, and when I send documents to senior executives at the company, I know who is reading them, where they are reading them, and I can prevent any person whose identity is not verified from reading these documents."
It is probably no coincidence that Blackstone's first Israeli investment is in data security. The combination of cyberwars and the increasing availability of data everywhere due to the prevalence of smartphones and tablets, data security is becoming one of the hottest high-tech and economic fields. Two big Israeli companies in the field are Israel's Check Point Software Technologies Ltd. (Nasdaq: CHKP) and Imperva Inc. (NYSE: IMPV). Palo Alto Networks Inc. (NYSE: PANW), founded by former Check Point executive Nir Zuk, held its IPO at a market cap of $2.8 billion just a month ago.
WatchDox has raised $24 million in three financing rounds, and it is not yet a Check Point by any measure, but with Blackstone's backing, it could well be. WatchDox's operating concept is to create the network enterprise equivalent of a sterile work environment. It holds that data security is an integral part of a document, regardless of which network it was uploaded onto or on which device it is read.
WatchDox co-founder and CEO Moti Rafalin says, "We said, let's seek a solution that is not connected to the network, computer or application, to create a situation in which data is protected everywhere it is located."
Rafalin says that WatchDox's solution enables the secure sharing of documents, and monitoring and controlling them, even when they leave the enterprise network. It offers enterprises complete control of their documents, regardless of where they are sent. An enterprise can decide whether they can be copied, printed, transferred, or amended, and it can destroy them by setting a predetermined expiry date or for another reason, such as a decision to no longer share information with a former business partner.
Murphy says, "Before we had WatchDox, sending documents to executives was difficult: where to send them, and would they arrive on the right day? There was always a risk that material would be lost. With WatchDox, they receive the material at the moment we decide to send it. This gives us more time to prepare the material and to add things or correct errors in real time. They simply open their iPads, click on the WatchDox icon, and receive the updated documents. If this works for them, there's no reason why it won't work for everybody else."
Rafalin and VP customer success Noam Livnat founded WatchDox in 2008. Check Point and Imperva cofounder Shlomo Kramer was WatchDox's first investor and he serves as chairman. Kramer and Gemini Israel Funds invested $5 million in the company in late 2008.
Published by Globes [online], Israel business news - www.globes-online.com - on August 14, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012