New “Disruptive” Cloud Security Company Coming from Arbor Networks Co-Founder Dug Song

When I traveled to Michigan last month, my conversation with entrepreneur Dug Song left me with the impression that’s he very passionate about several things: startups, cyber security, and Ann Arbor.

I met with Song at Tech Brewery, the Dogpatch Labs-esque startup incubator space he founded in an old brewery building right in the University of Michigan’s hometown. He runs his stealthy new company, Scio Security, out of the shared co-working space, and is just shouting distance away from the dozens of other companies in the incubator that are plugging away at technology in the mobile, Web, and cleantech sectors. Before TechBrewery existed officially, Song worked out of the building as VP of engineering at Zattoo, an Internet TV service. He took the position shortly after leaving his previous startup, Arbor Networks, which was sold to Danaher (NYSE: DHR) subsidiary Tektronix this past summer, for a sum that was a “multiple” of its roughly $100 million in annual revenue, he says.

Arbor brings us to another aforementioned strength of Song’s: security—the Internet kind, that is. The firm boasts about 70 percent of the top tier Internet and telecom companies as customers. It’s become a standard in enterprise network security and is “the reason why the Internet has not melted down since 2002,” says Song, who started out as founding architect of the company and later held the role of chief security architect. The inspiration came from how easy it was for a teenage hacker—dubbed MafiaBoy—to launch massive online attacks that took down commercial websites from the likes of Yahoo! and eBay back in 2000, Song says.

Security isn’t the only thing that Arbor Networks and Scio Security have in common. Arbor started in 2000, in the wake of the tech crash. And since Scio launched in the past year, well, you get the picture.

“I like starting companies in recessions,” Song says. “It clears the playing field.”

Scio quietly kicked off in January, got its first customer in March, and will be a bit more vocal in the coming months about its cloud-based security technology, Song says. It’s a cousin of sorts to Arbor, doing for virtual security and small businesses what Arbor did for physical network infrastructure at large enterprises.

“Now the real threat is hackers going down market,” he says. “Attackers figured out there’s as much money to be had going after small businesses.”

With Scio, Song is looking to defend against the next wave of security threats—those at the user level. Hackers can get at smaller firms by going through their individual employees, via dangerous links sent through e-mails, he says. The startup—which is planning to change its name soon to Duo Security—is developing technology that aims to solve the problem of authentication for firms with remote workers, to ensure that the user logged in at a remote location is in fact the person who works for a given firm, and thereby prevent … Next Page »

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