A lot of data security is being done by securing the pipes that...

A lot of data security is being done by securing the pipes that carry the data (ie. network security). However, Covata has concentrated on securing the actual data (one encryption key per file) within the network pipes (granular data security). So we need to look at the advantages of granular data security over the traditional network security to get an understanding on where and when Covata may finally generate revenue.

Key-as-a Service (Covata Delta)
This is the potential big prize when it comes to revenue though it looks to be the longer term play. This method of granular data security is targeted at the "Internet of Things" (IoT) and has a huge advantage over network security. Securing "the network" is a lot harder in the IoT environment as data will not be running in the usual traditional networks commonly used in IT departments. Rather, data will be constantly moving between possibly hard-to-secure components (tractors, sensors, fridges, etc) that make up IoT. This changes the data environment completely as data is more vulnerable outside traditional networks and communication between components of IoT is harder to secure if you simply rely on a "protect the perimeter" strategy. The open and dynamic nature of IoT outside of the traditional network sways the advantage towards granular data protection which gives the Covata Delta product a massive competitive boost. This is why Cisco is so keen on the partnership with Covata IMO. It is more a long term play but the rewards are potentially huge as IoT progresses.

Secured File Sharing (Safe Share)
This is where revenue needs to be generated near term IMO. The advantages of the granular data security model is the granular policy, encryption and identification that comes with it. It gives good access control, tighter security up to "Top Secret" classification and excellent auditing capabilities. All these ingredients lead to compliance which is highly valued by bureaucratic organisations such as governments. Therefore "granular data security" has a big advantage over "network security" which does not have these compliance attributes as core traits. The good news is that the Safe Share product is now available in the UK Government digital marketplace which I think has a greater chance of sales compared to the Telco product markets. Their focus on the UK Government is a strategy I agree with.