Microsoft IP Ventures Program Looks to Irish Entrepreneurs to Lead New Company

REDMOND, Wash., June 9, 2009 –– In a connected world, software developers of all kinds need the ability to protect their code, license their software, and track the performance and profitability of their products. To fill that need, a new Irish company called InishTech is embarking on a worldwide business venture using software protection and licensing technology developed by Microsoft.

Aidan Gallagher, CEO and founder of InishTech

The technology, called Software Licensing and Protection Services (SLPS), was initially launched by Microsoft in 2007. SLPS provides tools that help independent software vendors (ISVs) and software developers protect their software. It also makes it easier for them to manage product licensing. Finally, SLPS enables customers to try, buy, activate and upgrade their existing software.

SLPS quickly gained some 120 customers after being released. Microsoft executives saw its value, but also felt it did not fit into the company’s core business line. Thus, through its IP Ventures program, which fosters innovation and product development by connecting entrepreneurs with Microsoft technologies, a deal was struck to move the SLPS division over to InishTech. In addition to providing startup funding to InishTech, Microsoft is providing entry into the BizSpark program, which provides business-critical software to startups.

SLPS protects developers from piracy problems such as reverse engineering. It also gives software developers tools to host their own license-management services, to perform those same tasks without hosting them on their own servers, and to protect software code through license enforcement and protection of intellectual property.

There is a significant need for the SLPS service in the developer community, says Eddie Amos, general manager for Development, Platform and Tools at Microsoft Corp. “New development environments provide major benefits in terms of speed and cost to ISVs but can also create security challenges,” he says. “The SLPS, and now InishTech, fills a security need by offering superior code protection as well as flexible licensing management services.”

To identify a partner who could create a new, separate business that would market and support the SLPS offering, Microsoft’s IP Ventures Program Director Sharieff Mansour worked closely with Enterprise Ireland, the enterprise development agency of the Irish government.

The result: InishTech will take over all of Microsoft’s existing SLPS customers as part of the agreement. Microsoft itself intends to be a customer of the new startup.

An Experienced Team

The InishTech executive team has a proven track record in building and growing companies within the software security space. CEO Aidan Gallagher brings more than 30 years of experience in the information and communication technology sector to his new venture. Most recently, he was executive vice president of Similarity Systems, a provider of business-focused data quality solutions.

(From left to right) Aidan Gallagher, CEO and founder of InishTech, Paul Rellis, managing director of Microsoft Ireland, and Feargal O Morain, Enterprise Ireland.

Gallagher says that when he was first approached by Enterprise Ireland, the formidable credibility of a Microsoft solution immediately piqued his interest in this venture.

“Right away, I could see it was a unique proposition. It’s not every day that you get the opportunity to spin out a business from Microsoft,” says Gallagher. “The product was already validated by people who were investing in the solution and had great traction within Microsoft. It also helped that John O’Sullivan, our chief technology officer, and I have logged in decades of experience in the software security domain. And of course, the added advantage of an established customer base made the prospect even more attractive to us.”

Gallagher has worked extensively with his co-founders, O’Sullivan, CTO and head of development, and David Smyth, CFO and head of operations at InishTech. While Gallagher led the global sales force at Baltimore Technologies, a global Internet security firm, O’Sullivan was the company’s engineering chief. Soon after, Gallagher met Smyth at Similarity Systems, where the business revenues during their tenure grew 20-fold over six quarters before being acquired by Informatica Inc. in 2006.

The impressive results of these earlier ventures helped garner attention among entrepreneurial circles, including Enterprise Ireland. Enterprise Ireland introduced Gallagher and his team to IP Ventures, which ultimately resulted in the spin-off. The creation of InishTech is one of many agreements between Irish enterprises and Microsoft that were supported by Enterprise Ireland. In 2008 Microsoft’s IP Ventures Program created an Irish startup, Zignals, through Enterprise Ireland, representing another example of this successful approach.

A Seamless Transition

One of the first priorities for InishTech will be to ensure a smooth transition process for all existing SLPS customers. The team has already engaged with all existing customers to make them aware of the transition, and will continue to ensure that they experience product and service benefits without any disruptions.

Once the transfer is complete Microsoft will remain involved in InishTech’s operations. “In addition to providing product service and support throughout the transition, we’ll have an equity stake in InishTech, be an observer on its board and manage this investment as a key part of our IP Ventures portfolio,” says Mansour.

Microsoft’s eHome group is already an SLPS customer, and InishTech intends to develop strategic customer and partner relationships with other divisions within Microsoft. InishTech is a member of Microsoft’s BizSpark program and will be actively marketing SLPS in association with Microsoft.

InishTech’s software-licensing technology makes it easy for software companies to protect their intellectual property. This screen shot shows how a developer can set parameters for licensing and protection.

The Road Ahead

At a time when the global economic downturn is forcing many businesses to close up shop, Gallagher is optimistic about launching his company and thriving in the current economy.

“While the economic challenges may be extreme, they are certainly not new for a team of seasoned professionals who have weathered similar storms,” says Gallagher, noting that an established customer base and a strong product provide a distinct advantage. “The important fundamentals in turbulent times are to take stock of the situation, manage your cash and make sure your customers are happy.”

He also points out that InishTech services will help customers manage their products more efficiently and reduce the costs of doing business. Immediate plans for InishTech also include adopting an aggressive strategy of developing both existing and new strategic partnerships, and leveraging relationships with channel affiliates to broaden its reach within the ISV community.

“We intend to actively build awareness that our product is the easiest solution to buy, deploy and manage,” says Gallagher. “When players in our market space think of IP protection and licensing, we need to ensure that the first name that comes into their heads is InishTech. We firmly believe that partnerships are key to our success, and we strongly encourage interest from potential partners and affiliates.”

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