Network Security July 14, 2010, 12:49PM EST

Promisec: Securing Networks from Within

The Israeli startup won a huge deal to protect computer networks for the State of Texas. Might Promisec be acquired before it gets to go public?

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Israel has made a name for itself in the field of Internet security, thanks in part to expertise emanating from the country's elite military intelligence units. Among the biggest success stories so far has been Check Point Software Technologies (CHKP), a world leader in "firewall" technology that guards external points of entry into data networks.

While firewalls keep unauthorized users and software out of a network, there's a growing danger from within. According to research firms Frost & Sullivan and IDC, the biggest threats to security these days originate with "endpoint" devices on a network, such as PCs and laptops, from which users can inadvertently—or purposefully—introduce viruses and other rogue programs into the seemingly secure confines of an organization.

That's where Israeli startup Promisec comes in. Based in Rishon LeZion, southeast of Tel Aviv, the privately held company makes a suite of software tools that analyze and manage all the devices attached to a network, automatically enforcing corporate IT policies and preventing violations such as unauthorized file access or uploads of malware.

"Eighty percent of the security threats come from within the organization, and that translates globally into annual costs that run into billions of dollars," says Promisec co-founder and Chief Executive Officer Amir Kotler. Customer enthusiasm for Promisec's solution drove the company's revenues up threefold last year, to $10 million, and sales could top $20 million in 2010, Kotler predicts.

cheaper management and maintenance

What sets Promisec apart from rivals? When Kotler and his co-founders launched the company in 2004, they marshaled their Israeli army know-how to devise a new approach to security. By remotely identifying and tracking every device attached to a network, the software inventories all the installed hardware and software and monitors compliance, network communication, and even energy use. Unlike alternatives from competitors such as Symantec (SYMC) and McAfee (MFE), the Promisec system is "agentless," which means it doesn't require software code to be installed in every device attached to a network.

The benefit of combining agentless network management and security into a single package falls straight to the bottom line. "Promisec's one-stop-shop solution can substantially reduce network management and maintenance costs," says Ariel Avitan, an industry analyst with Frost & Sullivan. Eliminating multiple layers of management tools from different vendors also simplifies the job of a chief information officer.

Promisec launched commercial sales in 2006 and has ambitious growth goals, hoping to turn profitable this year and to reach $100 million in annual revenues by 2013. The company has raised $14 million in four rounds of financing led by Old City Partners, a Boca Raton (Fla.)-based venture capital firm run by investor Tony Gelbart. Another key Promisec backer is Israeli corporate lawyer Issac Molho, who serves as a key advisor to Prime Minister Benjamin Netanyahu.