Deal Radar 2009: PGP Corporation

The original PGP Inc., a startup based on “Pretty Good Privacy” encryption software, was acquired by McAfee in 1997. In 2002, McAfee sold PGP’s assets to former PGP executives after being unable to harvest profits from the unit. But in 2002 the encryption market began to take off, and co-founders Philip Dunkelberger and Alex Doll were able to grow PGP into a leader in e-mail and data encryption. Based in Menlo Park, California, the company has offices in the United Kingdom, Germany, and Japan.

The company offers a wide range of encryption tools to safeguard data, email, hard disks, and mobile devices. In July 2009, PGP released new mobile security encryption solutions, PGP Portable and PGP Mobile 9.10, for organizations that share portable data and secure email on smartphones. PGP portable allows users to share encrypted data regardless of their operating system. Users don’t have to install additional software or have special machine privileges. PGP Mobile 9.10 provides comprehensive email and data encryption for Windows Mobile 6.0 and Windows Mobile 6.1 Professional Edition smartphones. It also includes encryption for email and email attachments (both stored and in transit) on Windows Mobile smartphones.

The company provides four support program options: PGP Bronze, PGP Silver, PGP Gold, and PGP Platinum. While PGP Bronze Support are aimed at small businesses and individual customers who don’t require round-the-clock enterprise support, the PGP Silver, PGP Gold, and PGP Platinum levels of support are targeted at enterprise customers. Customers, irrespective of their level, have full access to the PGP support site, including the PGP KnowledgeBase, FAQs and tutorials, and the PGP Community Forum.

The company’s solutions are used across a broad spectrum of industries including aerospace & defense, commercial banks, electronics & electrical equipment, health insurance & managed care, pharmaceuticals, and telecommunications. Over 110,000 enterprises, businesses, and governments worldwide use PGP’s solutions. Further, the company has a global presence with 96% of the Fortune 100, 74% of the Fortune Global 100, 80% of the German DAX index, and 71% of the U.K. FTSE 100 Index in its customer list. Some of the prominent names in its list include Affiliated Computer Services (ACS), Baylor University, and German media giant Bertelsmann. In December 2009, the company announced that Defence INFOSEC Product Co-operation Group (DIPCOG) has formally approved its solution, PGP Whole Disk Encryption—which provides enterprises a comprehensive, full-disk encryption for data on desktops and laptops—as suitable for use within the Ministry of Defence (MOD) and British Armed Forces.

According to research firm IDC, the encryption market is estimated to grow from $765 million in 2006 to $3.2 billion in 2011. PGP remains at the forefront in spite of competition from companies such as Check Point Software, Entrust, IBM, and RSA Security. An independent research network, TheInfoPro (TIP), said that PGP continues to be the number one “in use” provider of data encryption technology among Fortune 1000 companies in its “Information Security Wave 11 Report.”

The company has raised $51.3 million including an initial round of $14 million from Doll Capital Management (DCM) and Venrock Associates in August 2002;  a growth round of $10 million from DCM and Venrock in December 2005, and a $27.3 million Series C from DCM, D.E. Shaw & Co., Intel Capital, and Venrock in June 2007.  According to Hoover’s, PGP’s sales in 2008 were $31.7 million. The year 2008, incidentally, was the most successful year in the company’s history with over 30% growth year-over-year. The company ended 2008 with bookings growth of over 40%, and in 2009, PGP’s bookings increased 15% quarter-over-quarter (fiscal 2009 Q1 to fiscal 2009 Q2) in its Americas Mid-Market customer base, with a 16% increase overall in the EMEA region, a 79% increase in Asia Pacific, and a 300% increase in Latin America.

PGP, which just completed a company-wide Customer Satisfaction Index survey, plans to release several new programs based on the survey results. It aims to keep growing and has no plans for an exit.

Suggested Reading:
*Deal Radar 2009: Confidela
*Storage Market Shrinks After 21 Years
*Symantec Seems Operationally Challenged

This segment is a part in the series : Deal Radar 2009