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Netskope recently obtained a second cloud security patent for its CASB platform, one that could prove extremely beneficial in an increasingly competitive cloud security market that puts a premium on intellectual property.
The CASB startup was awarded another patent earlier this year for technology that “steers” enterprise traffic to cloud applications and provides real time visibility for those apps.
The new patent covers Netskope’s technology that provides granular data governance and security policy enforcement on cloud applications. Netskope CEO Sanjay Beri called it a “broad patent” that covers the ability to set policies for cloud app usage based on a number of variables, including device type, user profile, behavioral analytics and, perhaps most importantly, what data is being accessed in that cloud app and what is being done with it.
“This is the other side to the approach,” Beri said. “The first patent was about steering traffic to control points. That’s how you get the traffic to the cloud services. The second patent is about what you do with the traffic when it gets there.”
Netskope’s policies, which customers themselves set, are able to distinguish between downloading, modifying and viewing data within cloud apps. For example, Beri said a retail customer concerned about cloud data being accessed by unmanaged personal devices could create a policy for an app’s data that allows users to view the data but not download it.
Beri said the power of the new patent is the technology’s ability to give enterprises the proper context in how their cloud apps can and will be used. Most web application firewalls use basic “block or allow” policies, he said, but CASBs like Netskope can provide more insight and control around how a cloud app and the corporate data tied to it are being used.
Technology patents don’t usually make for exciting news, but in the case of the CASB market, they provide insight into how startups have evolved – and how they’re being valuated by investors and suitors. CASBs have evolved from offering basic visibility into shadow cloud usage to providing secure gateways to cloud apps as well as access control, data protection and threat monitoring. As these CASBs have evolved and matured, they’ve patented their unique approach and developed intellectual property (IP) for those sets of services.
And those patents have proven to be valuable – perhaps more so than customer base or revenue – to potential suitors. Blue Coat Systems’ recent S1 filing for a potential IPO revealed that Perspecsys, a CASB startup acquired by Blue Coat last summer for $45.5 million, had posted revenue of just $2 million for the first half of 2015. But Michael Fey, then Blue Coat’s president and COO, said the Perspecsys deal was about obtaining the startup’s patent for tokenization technology in the cloud.
Similarly, Blue Coat acquired another CASB last November in Elastica, which, according the Blue Coat’s S1, generated just $395,000 in revenue between January and November of 2015. Yet Elastica was able to command a purchase price of $280 million, thanks in large part to its IP and patent-pending tech.
Beri said Netskope recognizes how valuable IP and patents are in the security industry, which is why they’re doubling down on research and development. “We have the largest R&D team in the CASB market,” he said. “So you’ll see more patents for us in the future.”