Massive Data Thefts Spur Demand for GuardianEdge Encryption; Enterprise Data Security Software Developer Responds by Expanding Products and Growing Management Team

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GuardianEdge Technologies Inc. (formerly PC Guardian Technologies), a market leader in reducing the cost and complexity of enterprise data security, today announced a dramatic increase in demand for its Windows hard disk encryption product.

GuardianEdge Technologies Inc. (formerly PC Guardian Technologies), a market leader in reducing the cost and complexity of enterprise data security, today announced a dramatic increase in demand for its Windows hard disk encryption product. In the last year, enterprise purchases of GuardianEdge’s hard disk encryption software have doubled and now nearly 600,000 enterprise laptop and desktop computers actively use GuardianEdge’s Encryption Plus Hard Disk program to improve network security and protect confidential and sensitive data.

Encryption Plus Hard Disk protects 100% of a computer’s hard drive, including all unused space, using US government-validated cryptographic technology. Also, it provides access control to the Windows operating system, all applications running on the computer and all data files. As a result, Encryption Plus Hard Disk protects against theft of and unauthorized access to data files and network systems, and if installed properly the program eliminates the need to securely delete data on hard drives before the drives are disposed of or retired from service.

In addition to its full hard drive encryption solution, GuardianEdge develops applications that encrypt data on removable storage devices and email. In all, nearly 500 enterprises around the world use GuardianEdge’s encryption software to protect data at rest and on the move.

Surge in Demand for Hard Disk Encryption

GuardianEdge reports the surge in demand for its hard disk solution was driven by two factors: numerous computer thefts in the last 12 months that exposed millions of customer records and resulted in several high-profile news stories about consumer privacy and identity theft, and the quick passage in the US Congress and numerous state legislatures of dozens of identity theft bills that require encryption of sensitive customer data.

In 2005, numerous banks, colleges and government agencies were forced to report the exposure of hundreds of thousands of customer records on stolen computers. Organizations that reported exposure of customer data due to unencrypted computer theft include MasterCard, Bank of America, the University of California, and TransUnion, one of the nation’s three credit reporting bureaus.

A September 2005 report by Gartner, Inc., states that a company with at least 100,000 customer accounts to protect can spend, in the first year, as little as $6 per account for just data encryption or as much as $16 per customer account for data encryption, host-based intrusion prevention and strong security audits combined.

This same report also states that this compares with an expenditure of at least $90 per customer account when data is compromised or exposed during a breach. Likewise, the Gartner report states that these costs may escalate dramatically if proposed legislation mandating fines up to $11,000 per exposed and damaged customer account is imposed. In summary, the report states, “Protecting your data is well worth the investment – with or without Payment Card Industry compliance requirements.”

The Payment Card Industry Data Security Standard is an approach to safeguarding sensitive data for all credit cards. The standard was co-developed by Visa and MasterCard and creates a common industry security requirement for protecting cardholder data wherever that data is located.

Congress, States Demand Greater Data Security

Shortly after a rash of data theft scandals swept the US from February to May 2005, lawmakers in nearly 30 states introduced legislation designed to force data collectors and data managers to notify consumers whenever their sensitive personal information may have been compromised.

Now, at least 20 states have laws that affect any business or government agency doing business in or serving consumers living in Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Maine, Minnesota, Montana, Nevada, North Dakota, Tennessee, Texas, and Washington. For each one of these states, organizations are required to notify consumers when their personal information is or may be exposed -- except when those data files are encrypted.

Further, no fewer than major three bills in the US Senate and one bill in the House of Representatives contain similar consumer notification requirements. Each bill specifically identifies encryption as a critical component of a well-designed information security program.

The Senate bills include the following: the Identity Theft Protection Act (S1408, introduced by Senator Gordon Smith, R-Ore.); the Notification of Risk to Personal Data Act (S115, S751 introduced by Senator Dianne Feinstein, D-Calif.); and the Personal Data Privacy & Security Act of 2005 (S1332, co-sponsored by senators Arlen Spector, R-Pa., and Patrick Leahy, D-Ver.). In the House of Representatives, the data privacy and information security legislation is the Data Accountability and Trust Act (HR 4127, written by Representative Cliff Stearns, R-Fla.).

Prepared for Rapid Growth

In response to these market drivers, GuardianEdge this year took several strategic steps to ensure that it is poised to meet growing demand by large IT organizations for its data protection solutions.

The company expanded its operations by opening East Coast and Federal Government Sales offices, relocating its corporate headquarters to a larger site in San Francisco and expanding its software development offices in Virginia and northern California. Now, more than 70 professionals work for GuardianEdge in the U.S. and the United Kingdom, up from 35 at the start of this year. In addition, the company plans to increase its sales, marketing and engineering staff in the coming months.

Also, GuardianEdge earlier this summer announced Encryption Anywhere, the company’s new platform for reducing the cost and complexity of encrypting enterprise data ‘at rest’ and ‘in transit.’ Encryption Anywhere integrates the management of multiple encryption applications (such as hard disk, email and removable storage encryption) directly into Microsoft Active Directory, eliminating the need for an enterprise to install ‘yet another’ management console.

According to GuardianEdge CTO Noah Groth, the Encryption Anywhere solution results in a lower total cost of any comparable solution. “Encryption Anywhere reduces costs by leveraging an organization’s existing IT management and directory services structure. In addition, when one Encryption Anywhere application is installed, components for all other Encryption Anywhere applications are installed, simplifying the ability to scale encryption of hard drives, PDAs or removable media to any computer or user in the organization.”

About GuardianEdge Technologies Inc.

GuardianEdge is a market leader in reducing the cost and complexity of enterprise data security. Customers around the world depend on GuardianEdge solutions to protect sensitive and proprietary information, to ensure compliance with rules for safeguarding privacy, and to enable secure enterprise mobility. Established in 1984, GuardianEdge is headquartered in San Francisco and serves an installed base of more than half a million active users at leading global corporate and governmental organizations, including Lockheed Martin Corp., Deutsche Bank AG and Humana Inc. For more information, visit http://www.guardianedge.com/

Encryption Anywhere is a trademark of GuardianEdge Technologies Inc. Active Directory is a registered trademark of Microsoft Corporation. All other products and services mentioned are trademarks of their respective companies.

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Steven Lerner-Wright
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