Cloudmark: Vapor Customers

By Baselinemag  |  Posted 2005-03-07 Print this article Print

Cloudmark may exaggerate its customer wins, but those who actually use the startup's products say they do the trick.

Cloudmark claims its software is used at more than 2,000 companies. But the startup may be embroidering the truth: Several of the "corporate customers" touted by Cloudmark do not have its products widely deployed.

Nine organizations listed as customers on Cloudmark's Web site—Fidelity Information Services, Hilton Hotels' Doubletree Hotels, Michigan State University, the New York City Department of Education, Nolte Associates, Rainmaker Systems, Restoration Hardware, Southern Methodist University and the University of Nebraska at Lincoln—told Baseline they were not using its products in any significant way. For example, New York's Department of Education runs Cloudmark's software on just one computer. "Cloudmark is not a major vendor for us," says spokeswoman Toni Bunn. View the PDF -- Turn off pop-up blockers!

Cloudmark's explanation? "You're just not talking to the right people," says a spokeswoman. Cloudmark said it would provide contacts for the nine organizations. It sent three: One at Rainmaker, who is no longer with the company; one at Nolte, who said it dropped Cloudmark a year ago; and one at New York's Department of Education, who confirmed the agency runs Cloudmark on only one PC but that it plans to add the software to 20 more.

Meanwhile, those who actually use Cloudmark's software say it does the trick. The company's Authority server software is "meeting our requirements and keeping our users happy," says Paul Butler, who manages the e-mail systems of the U.S. General Services Administration.

But Cloudmark's software for the Microsoft Exchange mail server lacks features useful in corporate environments, says Keith Schulenburg, systems administrator for Assisted Living Concepts, which operates elder-care residences. For example, the software does not provide an option to completely delete spam (which still appears in someone's "deleted items" folder). "Cloudmark is not thinking in terms of enterprisewide installations," says Schulenburg.

For small groups, SafetyBar—Cloudmark's consumer-oriented software for individual computers—is a manageable and effective tool, according to Lisa Minor, head of information systems at the 50-employee GHS Federal Credit Union in Binghamton, N.Y. "I felt we needed something simple at the source of the problem," she says. However, Minor adds, "If we had more users, I'd probably have gone with a different solution."

Antispam Systems

128 King St.,
San Francisco,
CA 94107
(415) 543-1220

TICKER: Privately held


Karl Jacob
Previously founded Keen, an online advice service. Spent two years at Microsoft after it bought Dimension X, a Java software startup he founded.

Jordan Ritter
Founded infamous file-sharing service Napster with Shawn Fanning in 1999. Left in 2000 to join Round1, a now-defunct financial services startup.

Authority bases filtering decisions on historical traits of unsolicited e-mail using Cloudmark's spam database. Immunity also uses the spam database, plus input from an organization's own employees about junk mail. SafetyBar software for individuals plugs into Microsoft's e-mail software programs.

Reference Checks

Assisted Living Concepts
Keith Schulenburg
Systems Administrator
Project: Elder-care services provider uses Cloudmark's Exchange Edition, in conjunction with GFI Software's MailEssentials, to catch 80,000 spam messages per week to 1,000 e-mail accounts.

David Burkhardt
Dir., I.T. Infrastructure
(415) 343-8400
Project: Travel reservations site provides SafetyBar to 45 of its 200 employees who have had severe spam problems.

U.S. General Services Administration
Paul Butler
Groupware and Messaging Team Leader
(202) 501-1231
Project: Agency uses Authority along with Tumbleweed Communications' antispam software to stop junk mail sent to 17,000 Lotus Notes users.

Brett Goldstein
Dir., I.T.
Project: About 100 of the restaurant reservation site's 130 employees use SafetyBar with their e-mail software.

GHS Federal Credit Union
Lisa Minor
(607) 723-7962
Project: New York credit union has used SafetyBar for some of its employees for two years.

Keys Energy Services
Randy Okum
Systems Analyst
Project: Florida electric utility uses SafetyBar on 130 desktops to catch an average of 600 daily spam messages not identified by its Symantec Mail Security for SMTP gateway software, which stops 4,000 junk mails per day.

Executives listed here are all users of Cloudmark's products. Their willingness to talk has been confirmed by Baseline.

Revenue, 2004 (est.): Less than $10M
Funding to date: $16.5M in three rounds

FTVentures, Ignition Partners, Presidio Venture Partners

Enterprise customers claimed: 2,000
Individual users claimed: 1.2 million

Other Enterprise Customers
Financial: American Century Investments, Credit Suisse Group
Manufacturing: Dolby Laboratories, Kelly Paper

Major Partners
Secure Computing (network-based security hardware and software), Openwave Systems (wireless data and messaging software), PayPal (online financial transaction software), Sendmail (e-mail server software)

Founded by Jordan Ritter and Vipul Ved Prakash

June: Launches beta version of SpamNet (now called SafetyBar)

April: Releases final version of SpamNet 1.0
July: Lands $4.5M in funding

June: Announces Immunity server software
Sept.: Receives $11M in funding

Sources: company reports, Baseline research


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