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Ncipher: NICKO AND ALEX VAN SOMEREN/Cambridge, England

2 minute read
Blaine Greteman/London

At age 12, Nicko Van Someren was already playing with the algorithms that are now used to secure data at the world’s top financial institutions. Ncipher, the company he founded with his brother Alex, has been equally precocious. In 1996, when banks and stores were unrolling cybershops, Nicko, far right, and Alex, Ncipher’s CTO and CEO, respectively, saw that existing encryption technology was not up to the task. And much of it still isn’t, even though IT security is a $20 billion business. In a recent survey by Deloitte & Touche, 39% of financial firms questioned said their computer systems had been compromised in the past year; 45% expect to invest in the kind of encryption technology made by Ncipher in the next 18 months. “My taxi-driver test has changed,” says Alex. “Six years ago, when I said I ran an IT-security firm, they said, ‘What?’ Now they say, ‘Wow.'”

Standard encryption, says the ponytailed Alex, is like an “armor-plated pipe that connects two places over the Internet,” and hackers know credit-card information is secure while it’s en route. But it turns out it’s easy to swipe the encryption “keys” from companies’ servers. So Ncipher developed a safebox for the keys that also speeds up decryption. “It’s kind of a Mission: Impossible thing,” Alex quips. Of course, smart technology doesn’t ensure profits–and Ncipher hasn’t turned one yet. But in October 2000, it launched one of the last IPOs of the boom, raising $173 million and valuing the firm at $663 million. Although it returned most of the money to shareholders and its market cap has fallen to $54 million, it is rich enough to make acquisitions. Losses narrowed 15% last year, to $12.6 million, and sales climbed 21% last quarter. Ncipher, unlike the instructions on Mission: Impossible, isn’t about to self-destruct. –By Blaine Greteman/London

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