Intrusic Shuttered

Intrusic -- an insider threat detection vendor -- has closed its doors, a company executive confirmed today.

CEO James Mobley, who joined Intrusic a few months ago, says the decision to cease operations was made early last week, and its remaining 20 employees "have begun looking for other opportunities."

Rumors had been circulating that Intrusic was winding down its operations after failing to gain a foothold in the crowded market for insider threat detection software. Mobley acknowledges the market is crowded, but adds there's plenty of room for competitors if they are positioned properly.

"The decision was made based on a combination of things," Mobley says. Intrusic looked at market opportunity, and the investment required to take advantage of it, he says, and then decided to end its operations. He says the company is still working out customer support issues and is approaching several companies about the sale of its intellectual property.

He says the insider threat space is a healthy market, and that "no one vendor is solving it in an end-to-end fashion."

After Mobley joined Intrusic, the company raised $8 million in Series B funding from existing investors North Bridge Venture Partners, Draper Fisher Jurvetson, and DFJ New England, bringing the total venture capital funding to $19 million, says Nick Selby, senior analyst with The 451 Group, which estimates the privately held Intrusic's revenues at less than $800,000 for 2005.

"It was one of those situations where you have to look at it and gauge the situation and make the best decision based on where you are," Mobley says of Intrusic's demise.

One analyst who requested anonymity says the insider threat detection market is problematic. "Nobody has a product in this space that doesn't require multiple full-time staff," the analyst says. "And nobody budgets even a single full-time person to a new, unproven security product."

The 451 Group's Selby says the insider threat market itself wasn't the problem. "We don't think Intrusic's decision is necessarily indicative of a lack of interest in these kinds of technologies, but rather of some unfortunate decisions at the company over the past couple of years," says 451 Group's Selby. Among its woes were "conflicting statements" about how its product worked and its features, he says.

Other vendors in the sector have also had difficulties. Seattle-based GraniteEdge announced layoffs and a revamp last summer, and New York City-based CounterStorm restructured in 2004, he says. Other vendors in this market include Securify, PacketMotion, and network behavior anomaly detection players like Arbor Networks, Lancope, and Mazu Networks, Selby adds.

He lauded Mobley's no-nonsense approach to communicating the company's strengths and openness about its weaknesses, and credited him with the introduction of Intrusic's consulting services.

— Kelly Jackson Higgins, Senior Editor, Dark Reading