[1]That's Racin' [INLINE] [2]Mercury Center [3][ISMAP]-[4]This image allows you to access site resources [INLINE] [5]Register for free e-mail Dispatches Sections [INLINE] [6]News [INLINE] [7]Business & Stocks [INLINE] [8]Technology [INLINE] [9]Sports [INLINE] [10]Opinion [INLINE] [11]Living & Comics [INLINE] [12]Weather Classifieds & Services [INLINE] [13]Jobs: Talent Scout [INLINE] [14]Homes: HomeHunter [INLINE] [15]Cars: CarHunter [INLINE] [16]Entertainment: Just Go [INLINE] [17]Yellow Pages [INLINE] [18]Mercury News Classifieds [INLINE] [19]Archives: NewsLibrary [INLINE] [20]News agent: NewsHound [INLINE] [21]Membership: Passport Related Features [INLINE] [22]Business Home [INLINE] [23]Business Today [INLINE] [24]Tech Wire [INLINE] [25]Mercury News Business [INLINE] [26]Apple Watch [INLINE] [27]Asia Tech Update [INLINE] [28]Breaking News [INLINE] [29]Computing [INLINE] [30]Getting Ahead [INLINE] [31]GMSV [INLINE] [32]HomeHunter [INLINE] [33]Intel Watch [INLINE] [34]Microsoft Watch [INLINE] [35]Money Tree [INLINE] [36]Silicon Valley 150 [INLINE] [37]Mortgage Watch [INLINE] [38]Motley Fool [INLINE] [39]Stocks [INLINE] [40]Talent Scout [INLINE] [41]Greg Carpluk [INLINE] [42]Dan Gillmor [INLINE] [43]Adam Lashinsky [INLINE] [44]Chris Nolan [INLINE] [45]Cheryl Shavers [INLINE] [INLINE] [46]Contact Us [INLINE] [47]About this page [INLINE] [INLINE] Posted at 12:54 a.m. PDT Sunday, September 13, 1998 Net Security Takes Key Step BY JAMES J. MITCHELL Mercury News Staff Writer TriStrata Security Inc. of Redwood Shores isn't your usual Internet start-up. Its chief executive recently gave up the reins of a $2 billion subsidiary to run it. The company's founder and chairman is the man who invented the personal identification number (PIN). America's largest accounting firm is already endorsing it. And its promise lured some of the best-connected executives onto its board. Three months ago, Paul Wahl was running German software maker SAP AG's U.S. operations, which has 5,000 employees and first-half 1998 sales of nearly $1 billion. Last week he became chief executive of TriStrata, a 35-person start-up that makes Internet security software. The reason for Wahl's sudden career change and move from Philadelphia is a tremendous opportunity . . .to make Internet history by changing the way the world keeps information secure on the Internet, says Wahl, 46. That same dream brought John Atalla out of retirement in 1993 to form TriStrata. Atalla, now 74, decades ago created the PIN system and the security used today in 80 percent of the world's automatic-teller machines. He was enjoying the beaches of the world when friends in the banking industry asked him to work on the problem of Internet security. Both men believe TriStrata's software -- which works efficiently with voice and video as well as with data -- will revolutionize electronic commerce, enabling companies to create virtual private networks and permitting, for example, the secure and inexpensive sale of software, music and videos over the Internet. Some outside observers agree. PricewaterhouseCoopers LLP, which is the largest of the Big Five accounting firms and has 2,200 employees devoted to Internet security, believes this could be the de facto standard for encryption technology, says Jim Coriston, a PWC managing partner. TriStrata software is being implemented throughout the firm, which is also offering the product to its clients. It's a whole different approach to cryptography, says Larry Dietz, director of information security and legal strategies for Current Analysis, a market research firm. Its key principles make a lot of sense. But some critics question whether TriStrata's product is as secure as the company claims. And the company faces tough competition from established security companies such as Network Associates Inc. of Santa Clara and Secure Computing Corp. of San Jose, as well as from computer vendors like IBM and Hewlett-Packard Co., which include security in their products. Atalla rejected the traditional approach for enterprise security using public key encryption, a system that uses two keys, both controlled by the user: a private key, which must be kept secret, and a public key, which can be freely distributed. Such systems can be broken, have performance limitations and have restrictions on the strength of the key that can be exported. Instead, he turned to the one-time pad approach invented in 1917 by Gilbert Vernam. It uses randomly generated numbers that are never replicated in the exact same sequence. The one-time pad is theoretically unbreakable, cryptographers agree. But it hasn't been useful because it requires so much computing and telecommunications power. Atalla decided that the great advances in computer memory and processing technology and today's powerful and relatively inexpensive communications capability made the Vernam cipher practical, and he built his security system around it. As a result, each encrypted document has a different code. The system is so fast, so inexpensive and provides such a good audit trail that it will lead companies to make encrypted transmissions the rule instead of the exception, Atalla and Wahl say. The federal government, including the National Security Agency and the FBI, has cleared it for export because the system allows access to specific documents for which an appropriate court order has been issued. The company expects the product to be received warmly overseas, since the U.S. government cannot decode information at will. But it's unclear whether this feature will diminish foreign concerns about U.S. security products. Skeptics wonder whether the company has created a sufficiently large string of random numbers to approximate randomness, Dietz says. And TriStrata's approach is so different it won't be an easy sell. It requires companies to transform their security systems, a decision likely to be made by the chief executive and chief information officers, Dietz says, not the people who normally purchase security software. Here the many contacts of Atalla, Wahl and TriStrata's directors should prove useful. Atalla is well known in the high-tech community. At Bell Laboratories his research resulted in his patents for the metal oxide semiconductor (MOS), a key component of modern electronic devices. Then he co-founded Hewlett-Packard Associates and Hewlett-Packard Laboratories and directed the company's solid-state division. He founded Atalla Corp. in 1973 and sold it to Tandem Computers Inc. in 1987. Atalla was able to attract to TriStrata a star-studded board that includes John Young, former chief executive of HP; Tom Perkins, partner in the venture capital firm of Kleiner Perkins Caufield & Byers; and William Zuendt, retired president of Wells Fargo & Co. and former chairman of MasterCard. The company released its first product last November. As it prepared to move from R&D to large-scale sales, it added as a director David Beirne, a general partner of venture capital firm Benchmark Capital. Beirne, who had made his mark as one of the most successful executive recruiters before joining Benchmark last year, approached Wahl about the CEO job two months ago. Wahl, quite content at SAP, was negotiating a move back to Europe with the company when Beirne called and persuaded him to fly here to take a look at TriStrata. After a second quick visit, Wahl and his wife decided to come west. TriStrata is unlikely to become a huge employer; Wahl expects the workforce to perhaps double to 70 in the next year or two and reach 200 over five years. But it's impact on the Internet could be quite dramatic. And Wahl found that attraction irresistible. _________________________________________________________________ Write James J. Mitchell at the Mercury News, 750 Ridder Park Drive, San Jose, Calif. 95190; phone (408) 920-5544; fax (408) 920-5917; or e-mail to [48]JMitchell@sjmercury.com . 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