1. Code Green Networks

When founded: October 2004

Headquarters: Santa Clara

CEO and background: CEO Sreekanth Ravi co-founded Code Green Networks in 2004 with Sudhakar Ravi, the company's CTO. Previously, the two co-founded SonicWall, where Sreekanth Ravi served as chairman and CEO and Sudhakar as CTO and vice president of engineering.

Funding: In three funding rounds, the company has secured US$32 million from Bay Partners, Sierra Ventures, and the company's founders.

What does the company offer? DLP appliances designed to protect customer information and safeguard intellectual property.

Why is it worth watching? The company recently released a modestly priced appliance targeted at small-to-midsize businesses (SMB) and branch offices. In contrast, most vendors focus on large enterprises, giving Code Green a solid niche in which to establish itself.

Two key features in the DLP space are data-in-motion (or network) monitoring and data-at-rest discovery. Code Green does not currently offer data-at-rest discovery, a feature it will need to add as Code Green moves upstream to target large enterprises.

Sreekanth and Sudhakar Ravi have a solid track record in the SMB market based on their previous experience at SonicWall, and this experience has translated into features, such as a wizard-driven setup and pre-packaged policy templates, that are tailored to organizations that don't have in-house security experts.

How did the company get its name? Code Green Networks was named after the Homeland Security Threat Index. A "code green" indicates the lowest threat level.

Who's using the product? Customers include Signal Financial Federal Credit Union, SonicWall, and Sourcefire.

2. Proofpoint

Founded: June 2002

Location: Sunnyvale, California.

CEO and background: Gary Steele previously served as CEO of Portera, a venture capital-backed applications company that targeted the professional services industry. Prior to Portera, Steele served as vice president and general manager of the Middleware and Data Warehousing Product Group at Sybase.

Funding: US$58 million from Benchmark Capital; Bridgescale Partners; Inventures Group; JAFCO Ventures; Meritech Capital Partners; Mohr, Davidow Ventures; and RRE Ventures.

What does the company offers? E-mail security and DLP solutions.

Why is it worth watching? Proofpoint has an impressive pedigree, founded by Eric Hahn, the former CTO of Netscape. The company's DLP strategy emerged from its original focus on e-mail security. Proofpoint's strength is monitoring and enforcing messaging policies, protecting users from both inbound and outbound messaging threats.

A lack of data-at-rest discovery features may be an issue for some potential customers. However, with e-mail still being the biggest threat and the most likely conduit for data theft, a DLP strategy that relies on messaging security as the foundation makes sense.