The bring-your-own-device (BYOD) trend in the enterprise has some definite advantages for companies, in that it can save money on the equipment sourcing and procurement end of the equation, plus it helps employees feel more comfortable with the tools they use at work. But there are also considerable downsides, including security concerns. WatchDox, a company founded in focused on ensuring secure information remains that way no matter where or with what hardware enterprise users are accessing it, this week announced a $9 million funding round.
The round is led by investment firm Blackstone, and includes Shlomo Kramer, Gemini Israel Funds and Shasta Ventures as well. Alongside the deal, Blackstone announced that it also becomes a WatchDox customer, implementing the product to help protect its proprietary information. Ryan Kalember, WatchDox VP of Strategy and CMO, told BetaKit in an interview that firms like Blackstone are a natural fit for products like WatchDox.
“Blackstone is easily our biggest customer now, being a $160 billion private equity firm,” Kalember said. “They now use us as their platform for all internal and external secure communications.” Blackstone does business with hundreds of companies, much more than a VC firm, and its transmissions were constantly leaking to news organizations like Bloomberg in the past since it had no real way to control access once documents were sent out and shared with its limited partners. What WatchDox provides is essentially a way to maintain control over those documents even after they’ve left the safety of the company – which can be particularly valuable if the nature of a business relationship changes.
WatchDox’s success is a direct result of the BYOD trend that’s being driven especially by Apple’s iPhone and iPad. “Every boardroom in western countries has iPads now,” Kalember pointed out. “And none of those iPads are company issued, except in very rare cases. One thing companies are doing [with the WatchDox iOS app] is providing secure access to board packages and other documents.” The digital delivery saves printing costs and has a green advantage, too, since it also saves paper. Plus, since WatchDox allows businesses to change and revoke access permissions for those digital documents on the fly, it’s more secure than printend materials, too.
Competitors like Firmex and Intralinks offer virtual data room (VDR) technology to allow consumers to share large volumes of confidential files, especially useful in conducting deals like those investment firms are regularly involved in. But Kalember said that VDRs are essentially “legacy technology,” and that what WatchDox is offering is a more modern solution. Firmex VP of Sales Aaron Booth told BetaKit via email that VDR tech is changing to adapt to the shifting needs of its users.
“The financial advisory community has long been using Virtual Data Rooms to manage M&A, due diligence, fund raising, and loan securitization processes online,” Booth wrote. “Increasingly, we are seeing law firms and corporations embrace the same technology to allow employees, clients, and partners to collaborate outside of their internal environment – everything from RFPs, Compliance Reporting, Financial Audits, Litigation and more.”
A challenge WatchDox and others trying to secure enterprise collaboration faces is helping its customers convince their employees to use its services over consumer-focused solutions like Dropbox and Box.net. Asked about that challenge, Kalember said it’s definitely been a top-of-mind concern for WatchDox in designing its products. In his previous career as a security information manager at Arcsight, Kalember says he saw first-hand how the effect consumer services have on enterprise security.
“The biggest consumers of enterprise bandwidth were either one thing or the other – one was Dropbox and one was Megaupload,” he said. “You can imagine how many business documents ended up there. IT wasn’t offering a proactive solution [in terms of secure alternatives] and that’s what we’re really trying to do.” The key, Kalember explained, is making sure that the enterprise offerings are as user-friendly and feature-rich as their consumer alternatives.
Part of that required WatchDox to make sure that no matter what device is accessing the documents it shares, they consistently look the same. That’s no small challenge, as devices like RIM’s BlackBerry use an entirely different process to render things when compared to something like the iPad. Making sure the BlackBerry is addressed is stil huge for clients, Kalember said, because though iPhone use is on the rise, RIM’s smartphones are still far and away the devices of choice among enterprise users.
Another key advantage of WatchDox’s offering is that it can work as a local server-installed solution for companies that aren’t eager to embrace the cloud and an SaaS model. Kalember said that providing that is important for ensuring the product appeals to institutions where data security is extra tight, and using the cloud simply isn’t an acceptable option.
This $9 million Series B round brings WatchDox’s funding total to just under $25 million since its incorporation and seed round in 2008. If the BYOD trend continues, and it shows no signs of slowing, securing info will increasingly be something businesses have to address, and the biggest challenge will be convincing employees that BYOD doesn’t also mean bring your own service.