Just back from a few days R&R and I read that NZ network protection provider Esphion has been purchased by an Israeli company, Allot, which paid US$5.5 million. Esphion has been in operation for 7 years or so with a global team developing software to detect and stop computer worms.

Interestingly Andy Lark, one of our best known IT exports, is listed as a director of Esphion, I’m figuring he’s also got a shareholding and will be thus pleased at the acquisition. No8 Ventures owns roughly 50% of Esphion so Jenny Morel will also be celebrating the deal.

Now hopefully the founders will take their new found wealth and develop new businesses in New Zealand.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

3 Comments
  • Falafulu Fisi |

    I had made contact with the head of R&D at Esphion about 3 years ago regarding some new intrusion detection learning algorithms that would be useful in their product development, in which I offered to develop those algorithms for them. I sent the references to those new algorithms, which clearly showed that these new algorithms outperformed the traditional popular Artificial Neural Network (ANN) that Esphion is currently using in its detection engine. Outperformed means that the classification errors of those new algorithms are lower than ANN. A detection engine that has a very low mis-classification error rate (ie, the percentage of misclassifying intrusion attacks as normal) is more robust. They were interested in those references I sent them to be developed in which the feedback to me, was if they do incorporate those algos into their system, then they would contact me to develop them. I am not sure whether they did or didn’t, but I am pretty much sure that ANN is the only algorithm in their engine. It is more common these days to use more than one algorithm in intrusion detection engine, since different algorithms, then vote on a certain classification (eg, intrusion or not_intrusion), then the outcome would be the majority votes. Using a single algorithm is fine, however when the training (learning stage) of the algorithm get biased, then there is no other way to check the bias since there is only one vote.

    The other thing, that I was surprised at the sale price. I thought that the price would be much much more than $5.5 mils, since this company had many well-known investors that got involved in it.

  • A disappointing result. It appears the investors will get back less than what they put in. But not all high tech investments make stellar returns. Perhaps Esphion simply could not gain sufficient traction globally on its own?

    http://geniusnet.blogtown.co.nz/2008/01/06/esphion-goes-softly-into-the-night/

  • Yeah i thought the price was peanuts…and how much in the way of grants did they get? nearly 500k? …..i’m surprised its being presented as a good deal. maybe it is?

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