CipherCloud CEO Pravin Kothari

The company’s cloud gateway encrypts customer data in real time before it’s sent to the cloud, company founder and CEO Praveen Kothari told me.  Its software appliance encrypts corporate data — using AES encryption – in Salesforce.com, Gmail,, Microsoft Office 365 and other applications — on premises before it hits the cloud. The encryption key stays with the customer, so not even the cloud provider can see the data even if it wanted to, he said.

The San Jose, Calif. company just netted $30 million in new funding from Andreessen Horowitz, Index Ventures and T-Systems, the venture arm of Deutsch Telekom. Those companies also participated in an earlier $1.4 million seed round.

The company has good enterprise security DNA: Kothari, was co-founder and SVP of engineering for ArcSight,the data security company HP acquired years ago for  $1.5 billion.

The new funding will be used to staff up: the company expects to double its current 130-person staff next year. A key priority will be to expand sales and marketing and its global presence. CipherCloud claims 49 major, but undisclosed, name-brand companies as users, including two of the largest 5 banks in the US.

Cloud security is a key problem to attack. Large corporations still cite security as a key hurdle to broader cloud adoption. If they can be assured that their data remains under lock-and-key even if it’s outside their data center, they can meet key compliance and regulatory hurdles.

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Sumo Logic emerged from the shadows on Tuesday with $15 million in Series B funding from Sutter Hill Ventures, Greylock Partners and Shlomo Kramer, bringing its total to $20.5 million since its founding in April 2010. Greylock and Kramer also participated in the Series A round.

The company, founded by Arcsight veterans Kumar Saurabh and Christian Beedgen, aims to bring log monitoring and analytics to cloud computing environments via a Software-as-a-Service model. In that arena, Sumo Logic is bound to face off against Splunk, which filed for a $125 million IPO two weeks ago, as well as Loggly, a company that spun out of Splunk (see disclosure).

Computer logs — and other machine data — are an important component of the big data phenomenon. This machine data, if collected, analyzed and searched — provides important insights into how systems and applications are working (or not) and can pinpoint bottlenecks, server errors and other glitches before they get out of hand.

“As infrastructure gets more complex, there are not only more systems and more heterogeneous systems but not everything sits in the customer data center anymore,” said Beedgen, who is also Sumo Logic’s chief architect and director of engineering. That means on-premises logging systems — which he contended are expensive to maintain and upgrade — are on their way out.

“The idea of sitting in a data center with a nice perimeter around it and just listening to what’s happening there isn’t going to cut it anymore,” Beedgen said in an interview on Monday. The trick is to see into a customer’s computing infrastructure regardless of where it is running. Once those logs can be viewed and monitored, forensics can be applied to pinpoint and trace security threats or other problems.

The service has been in use by select customers including Roblox and Ooyala for a few months. Roblox, an online gaming company, integrates Sumo’s service into the Amazon Machine Images (AMIs) it uses to run its business. These “instrumented” AMIs give Roblox visibility into its Amazon infrastructure, Beedgen said.

The ability for companies to have a window into their compute infrastructure, wherever that is, will only get more important as more workloads move out of the customer’s own data centers and into the cloud. For more on this big data phenomenon, be sure to check out GigaOM’s Structure:Data Conference in New York City on March 21 and 22.

Disclosure: Loggly is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, the founder of Giga Omni Media, is also a venture partner at True.

Photo courtesy of Flickr user 401K

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Hewlett-Packard has agreed to buy security software maker ArcSight for $1.5 billion in cash, as the computer giant tries to expand the range of services it offers corporate clients. Cupertino, Calif.-based ArcSight’s products are used by corporations and government agencies to detect suspicious activity on their networks. The purchase price represents a 24-percent premium to the software company’s trading price before the offer was made.

Analysts said the acquisition of ArcSight is part of HP’s move to offer more value-added services to corporations who are trusting an increasing amount of data to the cloud, whether it’s a cloud the company itself operates or one run by a number of SaaS providers. As VMWare CEO Paul Maritz said recently, this move places an increasing strain on security systems as data flows out of the corporate network and onto a variety of third-party platforms and mobile devices. In HP’s news release about the deal, HP VP Bill Veghte said “the perimeter of today’s enterprise is porous.”

Aaron Rakers, an analyst at Stifel Nicolaus, told Bloomberg that the acquisition of ArcSight will help HP serve the data-center market, which he described as necessary to the company’s growth strategy as it tries to turn its leadership in PCs into a bigger role in corporate computing. Other hardware makers are also investing in security: Intel Corp. recently agreed to pay $7.68 billion for security software maker McAfee.

HP, which is still struggling with the departure of its former CEO Mark Hurd — who has since joined competitor Oracle as a senior executive, a move that’s now the subject of a lawsuit between the two companies — has been moving into the storage and data-center market with a number of recent acquisitions, and seems to be willing to pay a hefty premium in order to do so: The company recently won a bidding war with Dell for the right to buy storage-system maker 3Par for $2.35 billion, a price more than three times the company’s market value before the bidding began.

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Post and thumbnail photos courtesy of Flickr user wlodi