Food for thought: Dinner with SafeNet

SafeNet's Chris Fedde

SafeNet prides itself in anticipating changes in the marketplace.

Rather than spending time analyzing where the data protection and encryption market finds itself today, Chris Fedde, SafeNet’s president and chief operating officer, says he and his company’s inner circle, spend their time thinking about where the market is heading two years from now.

They’ll brainstorm, scratch their chins and undertake challenging R&D projects during the next 24 months that, theoretically, will position themselves to be able to exploit the upcoming shifts they foresee in the market.

This strategy proved to be successful in recent years, Fedde told me at a small dinner for journalists hosted by SafeNet in Washington, DC, on June 23. His company had anticipated a dramatic surge in interest in “cloud computing,” and prepared itself to deal with the numerous security- and data protection-related business opportunities that would inevitably emerge as a result.

Today, SafeNet believes it is ready to help its government and commercial customers take advantage of the benefits that can be derived from Internet-based “cloud computing,” without exposing their intellectual property or proprietary information to undue cyber-risks.

Unwilling to rest on their laurels, SafeNet’s business and technology leaders are now getting ready for what they see as the next shift in their marketplace. This time, they anticipate a dramatic increase in interest among their customers in “protecting the data,” wherever it is. No longer concerned with simply safeguarding the “perimeter” of a computer network -- with sturdy firewalls and sophisticated intrusion detection and vulnerability assessment tools – SafeNet is applying its considerable brainpower to the task of protecting classified or other “high-value” information, wherever it moves and whenever it sits still.

“We’re not perimeter guys,” says Fedde. “We go inside the network and protect the data.”

To do this, SafeNet believes it must help its customers answer some thorny questions: Who actually owns the data? Who is allowed to access that data? How do we know that the would-be recipient is who he claims to be? Questions like these fall into the general category of “data protection,” which SafeNet now sees as its sweet spot.

“Identities, encryption keys, authorization policies all travel with the data,” Fedde explained. SafeNet is focusing on developing its expertise in these areas because it believes that this is where the market is heading. In a year or two, by the time other data security experts recognize the same thing, SafeNet will have already staked its claim to this burgeoning niche, Fedde claims.

SafeNet was a publicly traded company until a little more than three years ago, when private equity firm Vector Capital took it private in early 2007. Rumors are now circulating that SafeNet may announce in the next few weeks a return to the public market with a new IPO, underwritten by a handful of bulge bracket investment banks, but Fedde wasn’t talking on June 23^rd. “SafeNet says it has ‘nothing to say’ about those rumors,” Fedde told his diner guests.

Time will tell.