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Applied Identity Adds $8M

2005 is looking like a good year for security startups. Data center specialist Applied Identity is the latest vendor to bring in the money, clinching $8 million in its first VC-backed funding round (see 2005: Smiles for Software Startups and Startup Skybox to Raise $10M).

Led by Bay Partners and Sigma Partners, the
funding dwarfs the $2 million Applied Identity received from angel investors in 2003. The cash will be used to help establish a stronger presence in the security market, says the companys CFO Greg Patti. “The core development work is done -- we are using the money primarily for sales and marketing,” he says.

Applied Identity’s flagship offering is the Identiforce gateway device. The 2-rack-unit-high box sits behind a firewall, but, whereas many security products are tailored to external threats, this one deals with the internal network.

The challenge of securing internal networks was a major talking point at this publication's Next-Generation Data Center Forum event last month in New York. Many firms struggle to deal with security breaches caused, either deliberately or accidentally, by their own employees.

The Identiforce device works with software such as Microsoft Corp.’s (Nasdaq: MSFT) Active Directory to divide the network into different segments. It can then limit and control access to these segments as defined by specific users, such as the network manager or even CFO, says Patti. This can also limit the spread of external threats like worms, he adds.

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