Napera Networks Evolves, Moves Into Purely Cloud-Based IT Security

Startups almost never end up doing what they started out doing. The key is, can they adjust to the market and find enough paying customers before they run out of money? Here’s an interesting case study in the making: Napera Networks.

The computer-network security startup, based in Mercer Island, WA—are there any other startups there?—is announcing a new product direction and strategy today. Napera is rolling out network management software that is based entirely in the Internet “cloud,” and will be sold to small-to-medium-sized businesses through a software-as-a-service model. The software, called PC Security Informer, helps IT administrators efficiently manage the security of employees’ computers—dealing proactively with things like anti-virus updates, spyware removal, and firewall breaches.

It sounds pretty straightforward, but the key opportunity is that most smaller companies (with a couple hundred employees or fewer) don’t want to spend a lot of money on complex security systems from Microsoft, Cisco, or Computer Associates (CA), for example. Napera says it offers an easier and cheaper solution to the basic problem of businesses’ machines being insecure.

“We’ve wrapped it in a very Web 2.0-like wrapper,” says Todd Hooper, the CEO and co-founder of Napera. “If you can use Facebook, you can use our apps.”

Hooper, an expert in network security, co-founded Napera in late 2006. Before that, he had co-founded Momentum Pty, an Internet security consultancy in Australia, and audio software firm Trillium Lane Labs, and had been vice president of business development at Seattle-based WatchGuard Technologies.

What’s interesting is not necessarily whether Napera’s technology is really better than that of its competitors, but that the company has found a way to evolve from a business model that wasn’t working. Hooper says that by the fall of 2008, it was clear that Napera’s original model, which depended on global distribution of its software through channel partners, was too expensive. Around that time, the economy crashed and he was unable to raise more money.

So the company changed up and moved to a purely cloud-based subscription business model, analogous to Google Apps for businesses (things like Gmail, Google Calendar, and Google Docs). That was no easy task; it took Napera most of 2009 to switch over. It now has about 150 beta customers for its new service.

Hooper hopes the timing is right now. “When we started in 2006-2007, it was a little too early to say, ‘It’s a pure [software-as-a-service] model,’” he says. “There has been a pretty dramatic change in the last couple of years.”

Of course, with that change comes a lot of competition, from companies like Spiceworks, SolarWinds, PacketTrap (acquired by Quest Software in December), and Paglo (acquired by Citrix and announced last week). Hooper maintains Napera’s approach is different from all of theirs, mostly because of its new business model.

Napera currently has a dozen employees, and is not profitable as of yet. It is venture backed by Kirkland, WA-based OVP Venture Partners, which also funded WatchGuard (one of the VC firm’s most successful exits, in fact).

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] Follow @gthuang

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