German data security firm expands to Grand Rapids

March 30, 2009
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For most companies, four out of five successful attacks on their computer system come from the inside and probably by mistake, said Frank Schlottke, CEO of Applied Security GmbH. The German company, which recently launched a U.S. operation in Grand Rapids, works in data and document security solutions to prevent data loss and leakage with an emphasis on usability.

“Security shouldn’t be in the way of the user. It shouldn’t keep you from doing something; it should enable you,” said Schlottke. “It’s totally transparent to the user. They’re not seeing that there’s anything happening, and yet he’s protected.”

Applied Security was formed in 1998 by Schlottke and two other partners, Klaus-Peter Breitenbach and Volker Röthel. Originally, the company focused on software products and individual IT security solutions in encryption, digital signatures and authentication.

In 2003, the three came up with what is now their signature product in data loss prevention: fideAS. The software grew into 85 percent of the German health care market, encouraging the company to expand to meet the needs of its global customers.

The company’s most recent global venture landed it in the U.S. — more specifically, in Grand Rapids.

“I looked at several locations to start the operation,” said Schlottke, who had previously worked in Silicon Valley. “There’s people I can trust here — very good work ethics. You have Birgit (Klohs, CEO and president) from The Right Place, who was doing a lot to attract us. And she’s German, as well, so that probably helped.”

Grand Rapids also has strength in the health care industry, which the company is targeting along with financial industries. Still, Schlottke said fideAS will work for any company or industry that has internal files which need to be safeguarded.

“We’re focusing right now on the health and financial sectors, because these are the sectors that have confidential data that shouldn’t leave the company and would cause a lot of harm if it left,” he said.

“There are other industries where this is true, as well. Take a look at pharmaceutical companies or automotive companies, new development, R&D — all the data, all the essence of the company that actually needs to be protected and stay inside the company. If it’s shared, it should be shared in a very confidential way.”

The U.S. effort launched Feb. 17 and, according to Schlottke, is the company’s most important market.

“The U.S., for our product, is the largest market in the world, and the U.S. is the leading country in the world when it comes to IT, so that’s one reason,” said Schlottke. “The second reason is there are a lot of laws in place that enforce our product.”

In brief, what fideAS does is encrypt documents and files, allowing access only to employees with a certain clearance. For instance, the CEO would be able to access all files, but human resources could only access specific files. The IT department, which typically is able to access all files, would not have access to any files unless approved.

One example of how fideAS would function is when someone mistakenly sends an e-mail with a confidential attachment to the wrong person. In this case, the person receiving the e-mail would see there was an attachment, but would not be able to open it.

On the user’s end, however, nothing changes.

Looking forward, the company plans to continue to expand globally, hopefully into the Far East around the end of the year. The U.S. will remain as its main focus.

“The U.S. is the most important market for us. We’ll grow here in Grand Rapids, get more people on board. Sales people are the first ones to get on board, but we need technical people, as well,” he said. “We have the divide and conquer strategy. You can’t do everything on your own, so you’re looking for partners in specific segments that address a market and you team up with them.”

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