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WatchDox Secures the Corporate iPad

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If you run a hedge fund, the last thing you want is to find your latest financial report appearing in all its glorious detail on Bloomberg. But these days there's nothing to stop one of your limited partners from emailing that so-called confidential document to a curious reporter from their Apple (AAPL) iPad.

iPads just terrify corporate IT departments since they almost never approve their use by employees. But it turns out they are very popular these days among corporate directors and other top one-percenters.  And they are not under the thumb of the corporate IT department they way most corporate drones are.

So if a director gets a board presentation from the CEO and happens to email it to someone who then forwards it to someone who leaks it to the public, there is no way for the corporate IT department to find out where it came from.

But thanks to WatchDox, this does not have to be true. That's because WatchDox has implemented a radical new idea for corporate information security. Instead of trying to tie security to specific physical devices, WatchDox wraps a security envelope around corporate documents.

This approach is also quite helpful for securing other kinds of documents. For example, it is much easier for pilots to store a flight manual on their iPad than to carry 40 pounds worth of three-ring notebooks. But once the flight manuals are available electronically, it is just as imperative to keep them out of the wrong hands.

And for a movie producer, there is nothing worse than the script of a movie getting into the public's hands before the movie is released. After all, that unintended release could spill the beans on a key turn of the plot -- and change what would have been a blockbuster into something that most people decide they don't need to pay $15 to see in a movie theater.

One of the brains behind this idea of wrapping documents in security envelopes is WatchDox CEO and co-founder, Moti Rafalin, who I interviewed on February 3rd. Before co-founding WatchDox, Moti was the General Manager of Application Management Business at EMC (EMC).

His role at EMC was the result of its acquisition of nLayers. And Moti's impact on that business was profound -- the summa cum laude graduate of Israel's Technion and Harvard MBA turned "nLayers technology into a profitable business, doubled its team, and quadrupled its revenue and product portfolio."

WatchDox is "available as a SaaS solution or virtual appliance" and makes money selling subscriptions based on the number of users and the number of appliances -- with per customer revenues ranging from "small five figures to millions." To fund its development, WatchDox has raised $16 million from investors including Check Point Software (CHKP) founder Shlomo Kramer, Shasta Ventures, and Gemini Israel.

It's difficult to put a number on the size of WatchDox's addressable market. However, with the growth in the use of tablets by company employees and the growing popularity of storing and retrieving documents from the cloud, the technical trends supporting its growth are powerful.

WatchDox is going after this opportunity with a team of "more than 50 people" -- mostly in R&D and it expects that number to double by the end of 2012.

For the moment, WatchDox is fortunate not to face any direct competitors. And by 2016, Rafalin expects that there will be a billion tablets in corporate hands -- creating a huge market opportunity for WatchDox.

And if Rafalin can spur the development of new products that keep WatchDox ahead of any competitors that may choose to enter the market, it should prevail in what looks to be a burgeoning industry.