Financing News: PerspecSys and the Cloud Data Security Opportunity
Last week PerspecSys announced a new financing round that we participated in, alongside Paladin and Intel. We are very excited to be working with the team and our co-investors, and see tremendous potential for this company.
Over the last 12 to 18 months, we have witnessed an almost seismic shift in the posture of large enterprise customers toward cloud-based applications. SaaS has been around for over a decade – and many folks have realized the benefits and become early adopters – but the technology represents a big change for IT, and larger enterprises have been reluctant to move major applications or critical data to the cloud, due to fears of loss of control.
That is now changing. Whether driven by cost-conscious CFOs or CIOs, business teams that want enhanced functionality and accessibility, or just the spreading “grassroots” usage by employees, large enterprises are now in the cloud. In fact, most enterprises now use multiple cloud applications and expect to continue to expand the percentage of their outsourced IT resources from its current 5 – 10 percent standing to 50 – 60 percent by 2015. In February Gartner predicted that $677 billion will be spent on cloud services worldwide between 2013 and 2016.
And while the drive to adopt cloud applications is gaining momentum, the concerns and regulations around data security remain. Cyber attacks continue to grow in complexity and volume; 250,000 new pieces of malicious code are detected every day, designed to steal data and money, or deliver more sinister payloads by attacking infrastructure. Large enterprises are keenly aware of the need to protect sensitive data and are subject to substantial fines, as well as customer loss and other negative repercussions when violations and leaks occur.
This is where PerspecSys comes in. Its solutions, using certified encryption and tokenization, protect data while permitting use of the full functionality of the cloud application. PerspecSys not only solves data security for enterprise cloud users, but also addresses data residency laws common in Europe and parts of Asia, as well as data privacy laws present in many countries around the world. In short, PerspecSys truly enables enterprises to take full advantage of cloud applications such as SalesForce.com, ServiceNow, Oracle CRM OnDemand and more, without compromising on security and data protection.
On top of a compelling solution in a rapidly expanding market, PerspecSys also has a very experienced and strong leadership team, led by David Canellos. In conjunction with the funding announcement, David provided an overview of the state of the IT security industry and where PerspecSys fits in in a Q&A with USA Today’s Byron Acohido: http://www.usatoday.com/story/cybertruth/2013/05/09/venture-capital-cybersecurity-investments/2145313/
Our conviction around the potential for this company was only reinforced by the numerous customers, partners, analysts and industry veterans we spoke with as part of our diligence process. We want to thank these folks for generously sharing their perspectives and insights.
So, with fresh capital comes fresh expectations and new goals. We certainly expect a lot from PerspecSys and we will do everything we can to help them achieve their potential. Our congratulations to David and team on a successful funding round, and we look forward to working together.