From: William Knowles (wkC4I.ORG)
Date: Fri Aug 18 2000 - 04:35:31 CDT

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---------- Forwarded message ----------
Date: Thu, 17 Aug 2000 23:18:31 MDT
From: Redherring.com <catch_of_the_daylistserv.redherring.com>
To: wkc4i.org
Subject: Catch of the Day: Until there's a cure ...

Until there's a cure ...

A meeting with David Cowan of Bessemer Venture Partners opened my eyes
to the strange economics of two Internet security businesses
Bessemer's invested in: Counterpane and Qualys. My interest piqued, I
visited both firms.

Neither Counterpane nor Qualys actually fix security problems. Qualys
is a subscription service that does benign, automated hacks of
networks and then reports its findings to the customer company. It
shows where vulnerabilities are. Counterpane is downstream from that:
its team monitors (through a device it installs at customers' sites) a
company's networks and sends alerts when an attack is under way, or,
hopefully, when it notices the precursors of an attack.

Obviously the two companies are complementary, and one could assume
that at some point Bessemer may want them to be more than "partners."
But what's interesting to me is which companies they won't partner
with: both CEOs told me that getting into security software, for
example, just doesn't work -- it would put their current audit and
alert tools in the awkward position of potentially finding holes in
their own software. Other larger companies (like ISS) do have fuller
offerings, though. For a look into this market, see our special
report, linked below.

- Rafe Needleman, rafe-needlemanredherring.com
  Editor, http://www.redherring.com

FURTHER READING
* Special report: Internet security
  http://www.redherring.com/insider/2000/0724/tech-fea-security-home.html

* Can one security company do it all? Discuss!
  http://boards.redherring.com/WebX?13^217715.ee6d0e3

* Company site: Bessemer Venture Partners
  http://www.bessemervp.com

* Company site: Counterpane Internet Security
  http://www.counterpane.com

* Company site: Qualys
  http://www.qualys.com

* Company site: Internet Security Systems (ISS)
  http://www.iss.net

* David Cowan comments on beauty
  http://www.redherring.com/industries/2000/0425/ind-beauty042500.html

* Wall Street, VCs seek security shields after hack attacks
  http://www.redherring.com/insider/2000/0210/tech-hacks021000.html

* Hackers go corporate
  http://www.redherring.com/mag/issue71/news-security.html

* Home firewalls are in your future
  http://www.redherring.com/insider/2000/0201/tech-athome020100.html

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