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Posted at 12:54 a.m. PDT Sunday, September 13, 1998
Net Security Takes Key Step
BY JAMES J. MITCHELL
Mercury News Staff Writer
TriStrata Security Inc. of Redwood Shores isn't your usual Internet
start-up. Its chief executive recently gave up the reins of a $2
billion subsidiary to run it. The company's founder and chairman is
the man who invented the personal identification number (PIN).
America's largest accounting firm is already endorsing it. And its
promise lured some of the best-connected executives onto its board.
Three months ago, Paul Wahl was running German software maker SAP AG's
U.S. operations, which has 5,000 employees and first-half 1998 sales
of nearly $1 billion. Last week he became chief executive of
TriStrata, a 35-person start-up that makes Internet security software.
The reason for Wahl's sudden career change and move from Philadelphia
is a tremendous opportunity . . .to make Internet history by changing
the way the world keeps information secure on the Internet, says Wahl,
46.
That same dream brought John Atalla out of retirement in 1993 to form
TriStrata. Atalla, now 74, decades ago created the PIN system and the
security used today in 80 percent of the world's automatic-teller
machines. He was enjoying the beaches of the world when friends in the
banking industry asked him to work on the problem of Internet
security.
Both men believe TriStrata's software -- which works efficiently with
voice and video as well as with data -- will revolutionize electronic
commerce, enabling companies to create virtual private networks and
permitting, for example, the secure and inexpensive sale of software,
music and videos over the Internet.
Some outside observers agree.
PricewaterhouseCoopers LLP, which is the largest of the Big Five
accounting firms and has 2,200 employees devoted to Internet security,
believes this could be the de facto standard for encryption
technology, says Jim Coriston, a PWC managing partner. TriStrata
software is being implemented throughout the firm, which is also
offering the product to its clients.
It's a whole different approach to cryptography, says Larry Dietz,
director of information security and legal strategies for Current
Analysis, a market research firm. Its key principles make a lot of
sense. But some critics question whether TriStrata's product is as
secure as the company claims.
And the company faces tough competition from established security
companies such as Network Associates Inc. of Santa Clara and Secure
Computing Corp. of San Jose, as well as from computer vendors like IBM
and Hewlett-Packard Co., which include security in their products.
Atalla rejected the traditional approach for enterprise security using
public key encryption, a system that uses two keys, both controlled by
the user: a private key, which must be kept secret, and a public key,
which can be freely distributed. Such systems can be broken, have
performance limitations and have restrictions on the strength of the
key that can be exported.
Instead, he turned to the one-time pad approach invented in 1917 by
Gilbert Vernam. It uses randomly generated numbers that are never
replicated in the exact same sequence. The one-time pad is
theoretically unbreakable, cryptographers agree. But it hasn't been
useful because it requires so much computing and telecommunications
power.
Atalla decided that the great advances in computer memory and
processing technology and today's powerful and relatively inexpensive
communications capability made the Vernam cipher practical, and he
built his security system around it. As a result, each encrypted
document has a different code.
The system is so fast, so inexpensive and provides such a good audit
trail that it will lead companies to make encrypted transmissions the
rule instead of the exception, Atalla and Wahl say.
The federal government, including the National Security Agency and the
FBI, has cleared it for export because the system allows access to
specific documents for which an appropriate court order has been
issued. The company expects the product to be received warmly
overseas, since the U.S. government cannot decode information at will.
But it's unclear whether this feature will diminish foreign concerns
about U.S. security products.
Skeptics wonder whether the company has created a sufficiently large
string of random numbers to approximate randomness, Dietz says.
And TriStrata's approach is so different it won't be an easy sell. It
requires companies to transform their security systems, a decision
likely to be made by the chief executive and chief information
officers, Dietz says, not the people who normally purchase security
software.
Here the many contacts of Atalla, Wahl and TriStrata's directors
should prove useful.
Atalla is well known in the high-tech community. At Bell Laboratories
his research resulted in his patents for the metal oxide semiconductor
(MOS), a key component of modern electronic devices. Then he
co-founded Hewlett-Packard Associates and Hewlett-Packard Laboratories
and directed the company's solid-state division. He founded Atalla
Corp. in 1973 and sold it to Tandem Computers Inc. in 1987.
Atalla was able to attract to TriStrata a star-studded board that
includes John Young, former chief executive of HP; Tom Perkins,
partner in the venture capital firm of Kleiner Perkins Caufield &
Byers; and William Zuendt, retired president of Wells Fargo & Co. and
former chairman of MasterCard.
The company released its first product last November. As it prepared
to move from R&D to large-scale sales, it added as a director David
Beirne, a general partner of venture capital firm Benchmark Capital.
Beirne, who had made his mark as one of the most successful executive
recruiters before joining Benchmark last year, approached Wahl about
the CEO job two months ago.
Wahl, quite content at SAP, was negotiating a move back to Europe with
the company when Beirne called and persuaded him to fly here to take a
look at TriStrata. After a second quick visit, Wahl and his wife
decided to come west.
TriStrata is unlikely to become a huge employer; Wahl expects the
workforce to perhaps double to 70 in the next year or two and reach
200 over five years.
But it's impact on the Internet could be quite dramatic. And Wahl
found that attraction irresistible.
_________________________________________________________________
Write James J. Mitchell at the Mercury News, 750 Ridder Park Drive,
San Jose, Calif. 95190; phone (408) 920-5544; fax (408) 920-5917; or
e-mail to [48][email protected] .
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