Innovation & Technology February 25, 2010, 5:00PM EST

InZero: Closing the Gate on Cyber Crime

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What's different about InZero's approach is that it offers the protection of a second real computer, without having to go through the hassle of constantly wiping it down. The device that performs this task is no larger than a typical paperback book. "There isn't anyone else who has a solution like this in hardware," says Telos' Dorman.

Shevchenko dubbed the technology XB, after a Russian expression equivalent to a middle-finger salute. He found an angel investor in Ukraine, Alexander N. Dubrov, who came up with his own nickname: "Internet condom." Shevchenko filed patents and built three working prototypes. Then he ran a hacker contest, offering a Harley-Davidson (HOG) to anyone able to penetrate the system. No one did.

Alexander V. Pyntikov, a top Soviet Union government innovation official-turned-entrepreneur, got wind of the promising technology. Pyntikov introduced Shevchenko to Hughes, former president of General Motors' international operations and of Lockheed Martin (LMT). "I was very skeptical," recalls Hughes. "Here was this young guy saying he had invented a computer that totally protects from attacks."

Hughes became a believer after he arranged a test in 2003 at British Telecom's Ipswich labs and the company's computer scientists were unable to break in. He brought Shevchenko to the U.S., invested millions of his own dollars in a new U.S. company, InZero, and became its CEO, with Pyntikov as chief operating officer and Shevchenko as chief technology officer. (The name InZero nods to the claim that zero intruders can get in.) Since then the company has filed additional patents and spent several years simplifying the steps a user must take to operate the device. The current version has four processors and 60 million lines of software code. "It's a complicated little box," says Hughes.

At his office, the burly Shevchenko demonstrates how easy it is for a virus to penetrate a computer equipped with the latest updates of antivirus software and then send back information like credit-card numbers. The same virus is powerless against a computer equipped with the InZero device. Even so, he volunteers, "Our solution is not a panacea." It doesn't protect against so-called denial of service attacks, in which legions of PCs are infected with programs that can swamp a Web site by means of a coordinated assault. For just about everything else, from viruses to spying, the company claims the technology is a game-changer.

One of the most thorough evaluations to date was performed under contract by escrypt, a security company in Ann Arbor, Mich. Escrypt drums up new business finding security weaknesses and devising fixes, says CEO André Weimerskirch. So it was frustrating and surprising, he says, when a team of four people attacked InZero's system for more than two weeks without discovering a flaw.

Despite the successful tests, InZero still has hurdles ahead. The company has to prove to the U.S. government that its engineers, many of whom are in Kiev, haven't built in a back door for spies. "We have to show that nothing will be reported to Putin," says Pyntikov. Cost and complexity are also on Pyntikov's mind. The company hopes to market a family of devices for PCs, servers, and entire networks, with prices starting in the low hundreds. In two or three years, the hardware could be embedded into laptops, adding as little as $25 to hardware costs, says Pyntikov. If companies and consumers take the trouble to buy and set up the devices, there may finally be a gate that hackers can't storm.

Carey is a senior correspondent for BusinessWeek in Washington.