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6/6/2003
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Security Startup Readies Push Into Digital-Rights Management

Liquid Machines says its offering will make it easier for customers to control proprietary and sensitive information.

Security startup Liquid Machines Inc. is ready to make its splash into the enterprise digital-rights management market. The company next week is expected to unveil version 1.0 of its software, Liquid Machines, which the company says will make it easier for customers to control proprietary and sensitive information.

The software will automatically create, enforce, and monitor security polices placed on data, president and CEO James Schoonmaker says. Such polices include who can view, forward, alter, or even print protected documents.

When most people think of digital-rights management, the copy-protection mechanisms of E-books, movies, and music come to mind. But increasing concerns about intellectual-property theft and an increasing amount of federal and state legislation are creating greater interest in how organizations can better control and audit who can access what information--and what they can and can't do with that information once it's on their systems.

The newcomer is facing stiff competition from established vendors in this market, such as Authentica Inc. and SealedMedia. Microsoft and IBM are entering the market as well. Microsoft is adding Windows Rights Management Services, which is currently in beta, to Windows Server 2003, and IBM is retooling its Electronic Media Management Systems software to work with its middleware apps to control user-access rights to documents. Version 6 of Adobe Acrobat also comes with access rights and security-policy features.

But Schoonmaker is convinced his company is launching a strong contender. "Our software is easier to integrate and doesn't change the way people have to work with their documents," he says.

Not everyone is convinced. Eric Ogren, a senior Yankee Group analyst, says he's still "dubious" about the market hype surrounding enterprise digital-rights management. He also says Liquid Machines' architecture isn't that different from the competition, which requires users to install desktop software to decrypt content encapsulated with digital-rights management rules.

But cybercrime and fraud expert Nick Akerman, a partner with law firm Dorsey & Whitney, says the fact that the vast majority of corporate information is held digitally is driving demand for this type of software. "It used to be a manager would have to rent a truck and hire three people to come into the office and help him remove filing cabinets of information," he says. "Today, you can put it all on a tiny disk on a key chain."

Akerman says his clients are constantly asking him about ways to better control critical information. "Every company is going to have to take a look at how to solve this," he says. He adds that while no security technology is foolproof, the logs generated by apps such as Liquid Machines that detail who accessed what information, when they did it, and what they did with it (such as print or send it) not only creates a powerful deterrent to potential data thieves but is a good investigative tool should data leak into the wrong hands.

Liquid Machines is expected to be available by July; the company says pricing will start at around $50,000.

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