09.16.05
Protegrity acquires Kavado
When I first noticed application firewall in 2000, it was not a space to be recognized by research analysts like Gartner. But it made sense at that time since Internet was new, there were customers who need protection from cookie hajacking and SQL injection etc and it was hard to train programmers well, so the application firewall market has customers. Protegrity and Kavado will have nearly 300 customers across all vertical markets, 2/3 of that probably comes from Kavado. There is a market for this type of solution, but probably not big enough for a successful VC return. So the 2 software application firewall vendors I used to watch: Kavado and Sanctum are all gone. Sanctum got acquired by Watchfire, now part of F5. Hardware ones seem to have more legs: Teros, netComtinuum and Imperva. Teros recently got another $8M of funding. Hardware startups have more room to play due to its HW speed enhancement and ease of deployment. Software ones will be OK if it has more flexibility, comprehensive solution, integration points to existing systems. The issue is less of a technology leadership, more of a customer channel and partnership. As customers continue to look for vendor consolidation, in my opinion, startup exit will become more and more M&A driven than IPO
