PGP Inc. plans to announce its acquisition of a little-known Toronto-based software company called Zoomit, a move the encryption-software maker hopes will give it a beachhead in the burgeoning corporate security market.
In January, Zoomit began shipping the first meta-directory software — called VIA — that lets network managers access and modify from a single Web browser information in multiple directories. By this summer, PGP plans to use Zoomit's technology to manage the hundreds or thousands of encryption keys maintained by a corporation's security network.
Before this acquisition, which PGP has worked on for three months under the codename "Bluejay," PGP was only able to meet the privacy needs of individuals with PGPmail 4.5, its maiden commercial email-encryption product released in January. Zoomit's key server technology will help PGP position itself as major provider of enterprise-wide security software.
"Going into the corporation is where they need to be," says Bruce Schneier, a computer security consultant and author of Applied Cryptography, widely considered to be the seminal textbook on cryptography.
Computer security is emerging as one of the fastest-growing segments in the software industry, as corporate America takes stock of the vulnerabilities that come with merging their computer networks to the Internet. For example, Dataquest projects that companies will shell out US$6.3 billion to outside consultants for computer-network security this year and $12.9 billion by 2000. The market is actually much larger: Those projections don't include costs for in-house staff, security software, and hardware products.
Zoomit is the third and largest acquisition for PGP, which has grown from a freeware product to a 100-person company since its founding in February 1996. PGP's first acquisition, made last summer, was Viacrypt, the Phoenix, Arizona-based company that held the exclusive license for the commercial rights to PGP. In November, it bought PrivNet, which developed the sophisticated client-side filter it used to make its own cookie filter, PGPCookiecutter.
Although Zoomit was widely considered to have the technology lead in meta-directories, its marketing and sales presence, with only 25 people in the whole company, left much to be desired. Similarly, without Zoomit, PGP was faced with developing its own key server technology, a prospect that could have further delayed the company's entry into the corporate security market.
"This is a natural extension of our central mission to protect privacy in the information age," says Dr. Cathryn Turbyfill, a PGP executive. "We’re really excited about working with these guys."
