New firm helps companies combat data theft
Mike Ruffolo has big goals for his young business: He wants Liquid Machines Inc. of Lexington to be New England's next great tech company, right up there with Akamai or
Ruffolo's ambitions might seem lofty, but he knows those companies from firsthand experience. Now Liquid Machines is hoping that its technology, combined with Ruffolo's background, will be a winning combination.
"It's a company with tremendous potential," said Axel Bichara, a senior partner at the Waltham-based Atlas Venture, lead investor in the company.
Liquid Machines sells products that allow companies to protect documents and e-mail by determining who has access to such files.
Demand for such products is growing. Companies are increasingly interested in so-called enterprise rights management to protect their valuable intellectual property, as well as to fulfill new government regulations establishing ethical business practices, following the recent spate of corporate financial scandals, specialists said.
Nick Akerman, a partner in the New York office of the law firm Dorsey & Whitney LLP, said he recommends Liquid Machines' technology to clients as a way to combat theft of sensitive material such as client lists, trade secrets, and proprietary processes.
"It used to be to steal this kind of stuff, you'd have to pull up with trucks and carry out boxes." Now all it takes is a few clicks of a mouse, he said. "Every day, some major company gets robbed blind by someone stealing data."
Companies can use enterprise rights management to prevent such scenarios, Akerman said. "Based on what it purports to do, everyone seems to think it's a pretty good product," he said of Liquid Machines.
Ruffolo became president and CEO of Liquid Machines on Sept. 13. Although new to the Lexington-based company, the 43-year-old Ruffolo has a well-established career as a tech executive.
He served as chief operating officer at
"He's a very strong leader and manager. He's a strong CEO," Bichara said. "He's a person to watch."
Those weren't the only qualities that landed Ruffolo the top spot at Liquid Machines. Bichara said company leaders were also attracted to his experience "doing strategic deals with large companies," saying it's something Liquid Machines needs to do to continue to grow.
Company backers also appreciated Ruffolo's experience in the early days of the area known as enterprise rights management, a technology he encountered during his tenure at
"He is one of the very few people you find in the technology industry that looked at this issue a number of years ago," Bichara said.
Before his successful stint with Akamai, Ruffolo served as executive vice president of global sales, services and marketing at EMC Corp. Prior to that, he was president of the Document Solutions Group at Xerox, in which he had worldwide operational and profit responsibility for the group, delivering annual revenues of more than $3 billion. He was vice president and chief information officer at
Ruffolo isn't solely focused on technology, though. After leaving Akamai, he spent several months delivering food to senior citizens as part of the Meals on Wheels program and driving elderly patients to doctor appointments. (A father of three, Ruffolo has volunteered with youth programs but wanted to serve the elderly population because it "doesn't get enough attention from volunteers.")
He remained connected to the tech and venture capital community during this time. "I had no intention of leaving the industry," he said, adding that he was excited when an executive recruiter approached him about taking the helm at Liquid Machines.
"I liked the investors and the management team and the space we're going after -- it's a billion-and-a-half dollar market," Ruffolo said.
Ruffolo replaced Liquid Machines co-founder Jim Schoonmaker, who remains with the company as a director and in a strategic role aimed at expanding partner relationships. In announcing Ruffolo's appointment, Schoonmaker called him "one of the industry's most experienced technology executives."
Ruffolo's recent appointment isn't the only news coming out of the 3-year-old company. Liquid Machines last month acquired Omniva Policy Systems, a San Francisco-based provider of secure messaging solutions, for an undisclosed amount.
The acquisition helps Liquid Machines pitch its products as covering a complete range of business needs.
"Many customers need full document control on a variety of applications," said Stuart Goodnick, Omniva's former vice president of professional services and now director of technical services with Liquid Machines. "Both companies recognized the opportunities for a strategic partnership at some point . . . and an acquisition was the way to make that possible."
Liquid Machines' software allows companies to set policies that control access to the files.
"What we're in the business of doing is enabling organizations to secure, control, and share business-crucial information among themselves, customers, partners, and suppliers" without jeopardizing security, Ruffolo said.
Companies can determine who has access to which documents and what those workers can do with those documents. Companies, for example, can allow certain workers to read Word documents or PDF files, but prohibit those same workers from printing them out. Companies can even set expiration dates for files, preventing workers from opening them after certain dates. The policies even apply to material that has been cut out of the original documents and pasted into new ones.
"It's persistent protection. It goes with the document," Ruffolo explained.
Omniva's software offers similar protection, but does so specifically for e-mail, company officials said.
Liquid Machines' products, Document Control and Email Control, also allow companies to view a history of who has read the files -- or tried to access them without success.
Liquid Machines faces some challenges. Companies are interested in the protection, but are holding off on deploying the technology. And if they do invest in it, they have a choice of suppliers -- including local companies such as Tizor Systems Inc. in Maynard, Authentica Inc. in Lexington, and Atabok Inc. in Newton.
Liquid Machines declined to provides sales or profit figures, but said it has 25 customers and about 40 employees.
"What we're seeing is a lot of companies talk about it. We're not seeing a lot of companies deploying it," said Jonathan G. Gossels, president of SystemExperts Corp., a Sudbury-based provider of network security consulting services. Cost, complexity and interoperability issues are three factors limiting deployment.
But as the new leader as Liquid Machines, Ruffolo isn't wasting time positioning his company as the one that can overcome those obstacles. He sells the fact that the company's products are invisible to end-users -- unless they're doing something they're not supposed to.
The challenge is letting more people know about its application. Ruffolo is focused on developing Liquid Machines' customer base and deepening partnerships with key players, notably
"That's why I think we're going to build the next great tech company," he said. "I'm very, very bullish on this place."
