Texas companies tap local firms for cybersecurity protection | Crain's San Antonio

Texas companies tap local firms for cybersecurity protection

Cloudspace USA provides cloud computing and information technology management services to small and medium-sized companies, mostly in Texas, Oklahoma and New Mexico. Its 50 customers rely on the Houston company to help them maintain a stable, secure and updated computing environment to help drive their businesses.

Three years ago, Cloudspace USA received an email from one of its software suppliers, Alert Logic, that a large amount of data was moving from the virtual desktop of an administrative assistant at one of its customers’ offices to Russia.

The assistant was at lunch, but Cloudspace was able to dig into the network, find her virtual desktop, destroy it and recreate it with a minimal loss of data. “They [the customer] were thrilled we took care of it over lunch,” said David Levin, Cloudspace USA founder and president.

Cybersecurity has become a big challenge for companies globally, with the World Economic Forum ranking it among the four top global risk factors for 2018. Small to medium-sized businesses are particularly vulnerable, as they don’t always have a dedicated IT person on staff, much less one who specializes in cybersecurity.

So service providers like Houston-based Alert Logic have sprung up across the country to help companies specifically with their security needs. “It’s a very big problem and perennially understated,” said Misha Govshteyn, Alert Logic co-founder and products chief. “But over the last three or four years, with election hacking and top-tier management teams getting dismissed because of cybersecurity failure, it’s entered the public conscience.”

Govshteyn said if companies can detect a breach within 24 hours, they have a 99 percent chance of stopping it. “It’s not just about blocking things but knowing when they get in,” he said.

Alert Logic was originally backed by an early Amazon.com investor and early-stage venture capital firm Mercury Fund and was acquired by New York private equity firm Welsh Carson in 2013. It’s now up to 4,000 customers worldwide and generates more than $100 million in sales, a third of which comes from Alert Logic's fast-growing cloud business.

Alert Logic charges anywhere from $600 to $30,000 per year depending on the services needed and the size of the company. “If you hired a competent technical person, you’d pay three times that,” Govshteyn said.

Govshteyn said cyberattacks appear to have cooled off a bit since 2015 when there were a lot of breaches. But just because there aren't as many hacking incidents in the news doesn’t mean it’s not happening. “We’ve not seen a year yet when there are fewer attacks,” he said. “Right now, there are 4.5 billion people on the internet. We can’t ignore security anymore.”

Cybersecurity a top priority in Alamo City

Nearby San Antonio has become a cybersecurity industry hub given its military bases and the government work being done there. By one count, the city has 100 cybersecurity companies and growing.

One is Jungle Disk. The company was founded in Atlanta in 2006 but purchased by San Antonio cloud services provider Rackspace in 2008 and moved to the Alamo City. Eight years later, it was spun out of Rackspace in a buyout that was funded by management and family offices. 

Jungle Disk CEO Bret Piatt was part of the group, having previously managed a Rackspace business unit. He said the cloud security provider started over with 12 people working in the basement of a building on plastic tables. Its mission: to create a complete cybersecurity suite of products with a focus on small businesses with anywhere from two to 250 employees.

Jungle Disk grew fast and now boasts 25,000 customers. It doesn’t require contracts: Customers pay on a monthly basis anywhere from $4 per employee per month for basic data backup and encryption to $15 per employee for the whole suite of products, including protecting against cyberattacks.

Piatt said he’s seeing less ransomware these days and more scams revolving around cryptocurrencies, in which criminals take over companies’ computers and turn them into “mining rigs” to harvest more, effectively stealing companies’ computing power and running up their power bills. 

Piatt also is seeing a lot of information scams in which hackers pretend to be health insurance companies and ask personnel to fill out forms listing all employees and their Social Security numbers.

“People are falling victim to those things,” he said. “With our email security, we can alert and flag those types of emails before you see it.”

One Jungle Disk user is Asia Ciaravino, CEO of San Antonio Youth, which helps low-income children stay in school and dropouts get a second chance through high school credit programs. 

When Ciaravino took over the organization, the nonprofit had spotty data systems with information getting lost. Now everything is backed up regularly and the organization receives an email if there’s been a breach.

“The services we provide in San Antonio are so important to young people that without having secure data, we couldn’t survive,” she said. “I don’t even have to think about cybersecurity anymore.”

What’s Jungle Disk’s endgame? Piatt said he and his team are building the business for the long haul. “As we continue to move from paper to digital records, there will be a long-term need,” he said. “Everyone here is a long-term owner.”

February 13, 2018 - 12:26pm