Child Entrepreneur Caleb Sima: Cofounder Of SPI Dynamics (Part 7)

SM: How large did SPI become?

CS: We ended at 165 people with close to $26 million in revenue by the time we were acquired in 2007.

SM: How did your acquisition by HP come about? Were you expecting buyout offers?

CS: We built the foundation to have a great company. By 2007, we were on a skyrocket trajectory. We were doubling revenues every quarter. I always imagined that someone like ISS would come buy us. Instead, we received acquisition offers from companies like IMB and HP. They would come and make offers on a regular basis. Those companies came every year and made lowball offers for three years in a row. We would turn them down, and then a year later our revenues had doubled.

IBM made a final offer to us which we still felt was a low offer. We again rejected it, and they told us that we risked seeing their make an offer to our competitor. If IBM acquired WatchFire, our biggest competitor, then the risk was that they would just crush us with their resources. WatchFire had already acquired Sanctum, which had a Web application firewall and scanner. Their revenue levels were much less than ours.

SM: After you turned down IBM, what happened next?

CS: They started the process to acquire our competitor. HP heard that IBM was getting ready to acquire WatchFire and they wanted to compete with IBM. They came in and told us that they wanted to acquire us and that they wanted to announce before IBM did. The time limit gave us leverage to receive what we felt was the correct price for the company, which was in the range of $100 million to $150 million.

SM: Did you go to work for HP after that?

CS: I worked at HP as the CTO of application security and remained there until March 2010.

SM: What prompted you to leave?

CS: I am now the CEO of a company called Armorize. I left because HP tends to do its own thing when it comes to its technology acquisition. I felt I had reached the time where I was no longer effective. I am a small company person, not a big company person. I like startups and I like being able to wear many hats. The founders of a company I had known of for some time, Armorize, contacted me and I joined them as the CEO.

Armorize has two products. The first is a malware detection SaaS service. Armorize, coming from Taipei, always has battles with China. They have seen malware attacks from China for over four years. They created a technology to detect malware attacks against websites. Their Hackalert service will determine who has malware and who is serving it. They can then alert banks and clients to help them keep safe. We scan and monitor our clients every other minute remotely to ensure no malware has been injected to their site, including malware injection via advertising. If malware appears, we notify our client.

SM: You are about 30 years old now, right? How do you feel about the journey you have traversed so far?

CS: I am conflicted sometimes. I feel like an old man in this business. I know security like the back of my hand. I have seen the industry from its very beginning. I love security, although I have some distaste for certain aspects of the security industry. It is not as cool as it used to be. However, I still love doing what I do. It is something that still thrills me. I like to be able to know that I can break into a website or do things people do not understand.

SM: What do you feel about the ethics of this business?Are there others like you with your knowledge who are dangerous?

CS: They are always going to be there, and that will not change. Some people are criminals and some people are not. I am not a criminal because I can do legally all the criminal things I would want to do and get paid for it. Companies come to me and pay me to do criminal things to them. I don’t have to worry about getting thrown in jail, and I still get to have fun. If I were in security to make money then I probably would be a criminal. I could make gobs of money from running bots.

SM: How do we protect the world from these threats?

CS: It is a huge challenge. My job is to know the dark side so I can protect people. That is essentially what I do, and I really enjoy it.

SM: Great! Congratulations on your success to date and I look forward to watching your company progress.

This segment is part 7 in the series : Child Entrepreneur Caleb Sima: Cofounder Of SPI Dynamics
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