Atlanta is rising star in field of Internet security

Paul Judge’s bags were packed, and his mind made up: it was time to go west and throw himself in the middle of Silicon Valley’s 1990s dot-com boom.

But a brief meeting with some faculty members starting up Georgia Tech’s Information Security Center changed his plans. Judge stayed in Atlanta because of the professors’ pitch that the ambitious center would offer him the opportunity to conduct research in the emerging field of Internet security.

He is glad he did. Not only did he earn a doctoral degree in computer science, but he joined CipherTrust, then a rising star in Atlanta’s Internet security industry that was later bought by a large company. Now, he’s helping to shape Purewire, an Internet security firm formed from research at Georgia Tech.

Purewire has some startup money and is one of many examples that Atlanta’s Internet security industry is thriving despite a sour economy. New technologie s combined with a growing group of cyberthieves continue to create opportunities for new research and new companies.

“Atlanta is a good place to start a security company,” Judge said. It has enough companies and educational assets to attract talent, but not as many companies as in Silicon Valley, where job-hopping can be excessive. “There’s more loyalty, and you can focus on building a company.”

To a certain extent, according to experts, the niche is recession-proof.

“It’s like an alarm system in your house, it’s something that is a must-have regardless of what the economy looks like,” said Alan Taetle , a general partner with the venture capitalist firm Noro-Moseley Partners , which has invested in local information security companies.

Taetle is also a board member of SecureWorks , a home-grown security company that now has 300 employees. He said for every one successful Internet security business, such as SecureWorks or Reflex Security , there are four or five other companies that are germinating. Their specialties range from something as basic as blocking e-mail spam to stopping attacks that are referred to as denial of service — hundreds or thousands of computers blitzing Web sites with requests for information, rendering them unusable.

“The mobile threat is still emerging,” he said. “There is still a lot more work to do to make the Internet safe from mobile commerce.”

Atlanta is one of the sector’s three main hubs, with Silicon Valley and Israel having strong critical masses, too.

Several rapidly growing businesses in metro Atlanta have been sold to larger companies, and a handful of new companies like Purewire were spawned from university research.

Broader telecommunications companies here, such as Cbeyond and EarthLink, also are nurturing specialties in Internet security. EarthLink says it filters out more than 200 spam messages that threaten each consumers’ e-mail daily.

Besides CipherTrust, which sold to San Jose, Calif.-based Secure Computing in 2006, other companies that have attracted outside buyers include AirDefense , Cambia Security and Spi Dynamics .

Motorola recently said it would buy AirDefense, which makes software to protect wireless Internet systems, for an undisclosed amount. AirDefense’s president and CEO, Mike Potts, said the deal will help his company expand internationally more quickly than it would be able to do on its own.

“Despite the economic conditions, cybercrime is up, and the need for security is high,” he said. “We have seen virtually no slowdown. In fact, our business has accelerated in this economy.”

Entrepreneurs say mature companies such as Internet Security Systems, purchased by IBM in 2006, have helped provide for a rich talent pool.

“The folks I want to bring on, all of them are here,” said Sanjay Sehgal, a serial entrepreneur who helped start Alpharetta-based Pramana with technology from Georgia Tech. The fledgling company — whose name means “proof of reality” — detects whether a human or a computer is sending out cyberattacks.

Area experts trace the roots of Atlanta’s security business to ISS and Georgia Tech. Former students Tom Noonan and Christopher Klaus started ISS in 1994 and grew it to 1,300 employees before selling it to IBM. Klaus donated $15 million to the Georgia Tech’s Information Security Center, which has more than two-dozen faculty members and 100 graduate students. The Advanced Computing Building bears his name.

“We are the catalyst for the ideas, but then the talent takes the ideas and creates solutions. That is what attracts the venture capital and things like that,” said Mustaque Ahamad , the center’s director. “We do more and more important, valuable things over the Internet, but the trends keep evolving; the bad guys are smart.”

Many say the success of ISS helped spark interest in the investment community.

“Most of the money was made after IBM bought ISS,” Stephen Fleming , Georgia Tech’s chief commercialization officer. “It really justified the market: ‘Oh, we see we can make money off of these deals, let’s do them.’”

While ISS, SecureWorks and CipherTrust helped kick-start the information security industry here, experts are considering Purewire, Pramata, and another firm called Damballa among the startups that will keep it moving.

“You have these early companies that are pretty successful, and they produce local expertise and people who are willing to invest in something,” said Merrick Furst , a co-founder of Damballa who came from Georgia Tech’s College of Computing.

Furst said he pitched Damballa’s business plan to six venture capitalists and got back five term sheets.

“It’s perfectly possible to do things like this here,” Furst said. “It’s good to do wealth creation locally because the more you do it, the better it gets.”