To most people, Secure Cloud Systems Inc.'s product just looks like another line of software code, indistinguishable from the code that precedes or follows it.
But for the Colorado Springs-based company and its clients, which include large corporations, the Army and Air Force, its MicroTokenization technology creates a secure way to transmit sensitive information and commands between internet-connected devices by substituting a bit of randomly generated data or symbols for the sensitive data or command.
That bit of data, called the token, is sandwiched between hundreds of lines of code in an encrypted packet of data sent between the devices and expires after each use - Secure Cloud's software can generate thousands of new tokens a second.
The company last year won a key subcontract with partner MicroTechnologies LLC in a $5.79 billion Air Force contract for network operations and related information technology services to provide cybersecurity technology to the Air Force, Army, Navy, the Defense Department and other federal agencies.
Secure Cloud also is expected to soon receive task orders under a key subcontract valued at $200 million to $300 million to PD-Systems Inc. to provide its MicroTokenization technology under the Army's Tank and Automotive Command's $3.5 billion Strategic Services Solutions contract.
Under the Army task order, Secure Cloud's MicroTokenization technology would be used to help Army autonomous supply vehicles, designed to carry ammunition and critical supplies in combat zones, to communicate with command centers that would operate them, said David Schoenberger, the company's co-founder and chief innovation officer.
The order would come in two parts, he said: a research, development, test and evaluation phase valued at about $6 million in which the technology must be demonstrated and a deployment phase valued at more than $200 million.
"Governments are adding security to their existing firewall protection to data mobility and defense with the implementation of (Secure Cloud's) CertainSafe services," Steven Russo, Secure Cloud's executive vice president, said in a news release. "These two contracts acknowledged our emergence as an industry leader in the deployment of technology that allows for data defense resiliency and total protection."
The Army order would allow Secure Cloud to expand from its 27 employees to between 50 and 100 as it gears up to produce thousands of the devices and software that generates the tokens and help fuel the company's expansion into the commercial market where its technology could be used to protect sensitive mobile data ranging from an electronic key that opens a vehicle or a military commander to a tank, Schoenberger said. The company hopes to eventually expand the use of its technology to the "Internet of Things," or everyday devices that are connected to the internet.
Secure Cloud will operate under the CertainSafe (certainsafe.com) name for products that protect data stored in a fixed location, while it will use the brand Eclypses (eclypses.com) for mobile data, Schoenberger said.
"We have grown from just a software development company to selling our software to some of the world's largest companies and from securing data files at rest (that are stored somewhere) to securing data that is in motion," Schoenberger said. "This technology secures one piece of data at a time so that it can be done in real time and you don't have sacrifice either security of accessibility, which is critically important when you move to the 'Internet of Things' with machines communicating with machines and they are all intelligent devices."
Schoenberger and Tim Reynolds started Secure Cloud in 2009 with backing from a Texas investor after both left Guardian Payment Systems, which developed software for the payment processing industry. Schoenberger and Reynolds eventually secured East Coast angel investors, who bought out the initial financial backer and pumped about $10 million into the company to accelerate development of its MicroTokenization technology.
The company also boasts an advisory board of high-profile security experts, including former U.S. Rep. Pete Hoekstra, who was chairman of the House Intelligence Committee; Richard Marshall, former director of cybersecurity for the U.S. Department of Homeland Security; and Richard Purcell, former chief privacy officer for Microsoft Corp.
"We reached a couple of critical points at which the angels said they want to take this technology to the next level and they were willing to invest the money to do it," Schoenberger said. "We have created technology with 20 people that other companies would have needed 100-200 engineers to create. This is hard; we could use another 50 people because there are millions of lines of code behind all of this technology. Even if we ran out money, which we won't, the value of what we have created with this technology would pay everyone back handsomely."
Secure Cloud is considering raising up to $10 million from institutional investors to accelerate its expansion into the commercial market by tripling the size of its staff, mostly by hiring additional software engineers, Schoenberger said. That decision is expected by year's end, he said.
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