On cloud a16z: CipherCloud raises $30M from Andreessen Horowitz

By Richard Nieva , written on December 5, 2012

From The News Desk

“Cloud” is the buzziest of buzzwords. As you read this, your neighbor’s kids from down the street are setting up a cloud lemonade stand.

For the company CipherCloud, this popularity is a very good thing. So good, in fact, that today the cloud security company announced a $30 million dollar investment from Andreessen Horowitz (who also invested a sliver as a part of the company’s $1.4 million seed round). As part of the deal, John Jack, the former chief executive of Fortify software, will sit on CipherCloud’s board of directors on behalf of Andreessen Horowitz.

Businesses in several sectors are finally moving toward cloud-based operations. But while more and more companies are joining the party, it’s becoming harder to make sure a cloud server isn’t vulnerable to attacks or intrusions. CipherCloud claims to add a coat of protection to a business’s cloud operations without disrupting the functionality of the applications for an employee.

CipherCloud hopes that it can turn a cloud server – where a company keeps all of its emails and files and data – into a sealed fortress. But not a big, attention-grabbing Super Mario Brothers fortress but something subtle and inconspicuous. This means that the user is protected, and she doesn’t even know. Not even the employee at the cloud server company knows anything of consequence.

This is an important point when chief executive Pravin Kothari talks about an extra touch of security. The federal government made over 10,000 PATRIOT Act requests in the first half of this year, he says, and a data center worker is forced to comply. CipherCloud's approach is secret agent tactics 101: An employee can’t spill what he doesn’t know. “The customer holds onto the key,” says Kothari. “They never give it to the cloud provider.”

But even as companies move onward and cloudward – Pandora is one oft-cited high profile company that has moved its servers completely off premises – there is still a reluctance from the enterprise to fully embrace it. That’s because the biggest companies not only have the most data, they also have the most regulation policies and corporate procedures that trusting another company’s service – like Amazon Web Services or SalesForce or Gmail – to store its most important data seems insane.

With a strong enough security service, CipherCloud looks like it can be a gateway drug for enterprises to get high on the cloud. The company says it wants to be the enabler that leads businesses to the most commercially viable cloud options, like Amazon's cloud. CipherCloud would not disclose any of its customers, but said that the company already serves two of the top five banks in the United States, and sectors of the government at all levels.

Unfortunately, it does not look like CipherCloud covers lemonade stands.

[Image Source: FutUndBeidl on Flickr]