Startup of the Week / Incapsula Offers Small Firms Big Security Solutions

Incapsula, a subsidiary of Imperva, caters to small and medium companies who want top-notch security solutions.

Israelis think of Shlomo Kramer as a one-man data security superpower. He's the man behind a number of data-security firms, including Check Point.

One information security firm that Kramer helped found is Incapsula, a subsidiary of Imperva that is traded on the New York Stock Exchange at a market value of about $950 million.

Most of Imperva's revenues come from the sale of Web access firewalls, a market whose annual sales total about $300 million. Imperva's competitors in the field include F5, Barracuda and TrustWave.

Organizational firewall systems, a field in which Check Point pioneered, prevent outsiders and malicious software from accessing enterprise systems. To achieve this, they monitor, for example, the IP address from which the traffic arrives and decide whether it is coming from a familiar or an unfamiliar computer.

Websites that by nature were designed to address the general public cannot use protection of this type.

"If you think of enterprise computer systems like a shopping mall, firewalls protect the side entrances and the back doors. They ensure that undesirables don't reach the interior areas of stores and offices," says Mark Gaffan, vice president of marketing and business development at Incapsula.

"At the main entrances to the mall you want as many people as possible to pass through – that's what the entrances are for. Web access firewall systems were designed to provide a solution for that," he says.

Incapsula started out as an internal project at Imperva led by Kramer and Gur Shatz, one of Imperva's first employees, who at the time was the vice president of products. Kramer later added Geffen to the team of founders. He came to Imperva after a long period at Cyota, an Israeli security firm that was acquired by the American firm RSA.

In 2009 Incapsula became an independent firm. The shareholders are the three founders, the firm's employees, and Imperva itself, which has the controlling shares in Incapsula.

To date the firm has raised $10 million, after a first-round fundraising total of $3 million in 2009, and another round of fundraising in September 2011. Today the company, which operates out of Rehovot, has 35 employees.

Incapsula was created in order to provide a solution for small and medium-sized businesses in a field where the biggest players cater to the top market sector. "They provide solutions for a small part of the market; they turn only to the biggest players that can afford to pay tens of thousands of dollars for a security solution. We wanted to solve the problems of the small and medium companies," says Geffen.

In order to do so, Incapsula created a Software as a Service solution, which does not require the owners of the websites to install software or hardware.

"That was the only solution that enabled us to reduce costs sufficiently," explains Geffen. Today the company has about 100 servers all over the world through which traffic passes to the customers' websites.

"We both provide security and accelerate the speed of downloading the site," says Geffen. "Because we are in effect causing the traffic to make a detour via our servers, we had to create solutions to enable a fast downloading of the customers' websites, for example by storing the site near the end user, and today we also provide an improvement of about 40% in downloading speed."

In April 2011, after a year and a half of development, Incapsula entered the market with its product. "We've greatly expanded the WAV market," says Geffen. "Customers who once wanted to protect their sites but couldn't meet the $20,000-$40,000 monthly charge could now receive a solution costing a few thousand dollars.

"In the past year we've been growing by 50% each quarter. In the past year we've been discovering something that we didn't think would happen – although we designed the solution for small and medium-sized businesses, it turned out that big customers also want our solution, and today we're competing with the big companies."  

GPO