Cyber-Ark Software: Love and security

While he was in charge of systems and security at Mamram (the IDF Central Data Processing Unit), Alon Cohen tried to protect Israel's most classified state secrets. However, he never imagined he personally would be attacked by a hacker. In the course of his Mamram service, Cohen fell in love with a girl, who inspired him both during his service and particularly following his release. The lovestruck soldier felt the urge to write her a love letter during his breaks from writing computer code, and encrypted the letter in his computer.

One of the unit's soldiers decided to enhance his popularity by breaking into Cohen's computer and circulating the love letter to a large number of people. At the time, Cohen may have had every reason to order him to paint the entire base green, but many gigabytes have been born since then and Cohen should in fact thank him now. The incident made him rethink the entire matter of information network security and set up Cyber-Ark Software. The start-up is trying to change the general consensus about acquiring organizational security systems.

After his release from the army, Cohen held several advisory positions in the field of security at Cylink, Memco and some other large organizations in Israel. "My experience in the security world showed that there are a lot of different security technologies that are bought separately, but there's no integration solution, and expertise is needed to utilize them simultaneously," Cohen says.

As mentioned previously, Cyber-Ark's breakthrough is in its concept. Most security solutions are complicated and require an integrator to combine all the organizational layers into one system. This often makes the system complicated and expensive to manage. Cyber-Ark wants to provide a Plug and Play solution that will make internal security application much cheaper for organizations.

Cohen believes in concentrating on one area instead of trying to secure everything. His company will supply a secure storage area, and customers will transfer information to a virtual vault on the network's server, instead of mapping out all the places where information is stored and trying to secure them all.

" Data would still be stored in the organization, but the most vital information would be transferred to the virtual vault, which not only secures the information but transfers it to clients (a sort of Brinks for information transfer). As an analogy, suppose someone invests in securing his home by buying bars and an alarm. He would still want to place his savings in a bank, built specially for security, rather than keeping the money at home."

Cohen was inspired by the biblical story of Noah when he chose a name for his company. After all, the ark was the ultimate security solution. Noah wanted to protect the world from the flood and brought all kinds of animals into one ark, without trying to separately protect the zebras in Africa and the kangaroos in Australia.

"It's worthwhile keeping an eye on us"

Four months ago, the company launched its product and transferred its headquarters to Boston for marketing and sales purposes.

"Globes": Is there any room for another player in the security market, particularly one seeking to change the concept of network security?

Cohen: "There's certainly room for another player that can change the direction of the market. It's extremely difficult today to build high quality security - it's almost impossible and very expensive. CMP, one of the biggest companies in the field in the world, is holding a competition. The winner will be announced next month. I'm glad to say that we've been chosen to be one of the five finalists. The fact that we've been chosen is in itself a great achievement. Lehman Brothers chose us as the security company most worth watching in 2001."

What is the company's marketing strategy?

"We're putting the emphasis on cooperation with application, servers and storage companies that will sell our solution as part of their package. A server company can sell servers for virtual vaults. We're very attractive to applications companies. A prominent e-commerce company is working with us - its deals are transferred to our virtual vaults. We have a number of very interesting cooperation agreements that give us access and exposure to many potential customers. "

"On the other hand, we want to work with integrators that will offer our solution. We've signed several distribution contracts with companies like Bynet, Adanet, Global Simulation Systems (GSS) of the UK, and a number of US distributors."

Intuitively, the network vault sounds like a classic ASP application model. Have you thought of heading in this direction?

"Attempts have already been made to persuade us to go for ASP, but we said up front that we're a technology company and we shouldn't adopt the market fads."

How much does your solution cost?

"The basic price is $15,000 for 10 users, and $50-120 for each additional user. Each customer starts with one department, and we anticipate many more (departments) than that in two years."

A believer, like Gil Shwed

Cohen raised $1.5 million in seed money in 1999 from Cabaret-ArbaOne. In July 2000, the company held its first institutional financing round, in which it raised $6 million from Softbank, Nomura, and Chase Capital Partners at a company value of $30 million after money.

"I believe in investment banking," Cohen says. "Don't look at the fees. You get good advice and important contacts for closing the deal."

Cyber-Ark has several beta installations, including trials with Chase Manhattan and General Motors. This leads Cohen to predict that the company will be able to support itself within two years.

It is impossible not to mention a few words about Check Check Point (Nasdaq: CHKP). "The analysts claim we're the next Check Point," says Cohen, " I don't like comparisons, but I wish us Check Point's success. There are also other companies I would prefer to be like. We're registered in Israel and my ambition is for Israel to enjoy the fruits of our endeavors. In that way, we're similar to Check Point."

Published by Israel's Business Arena on 11 June, 2001