This week’s Q&A Wednesday is with Mirage Networks, an Austin-based company focused on network security, which was recently named Frost & Sullivan’s 2008 Entrepreneurial Company of the Year.  Austin Startup sat down with Greg Stock, President and CEO of Mirage Networks, to find out more about the network access control market, the history of the company, and his days as the longest tenured Drum Major in Penn State history.

Tell us a bit about Mirage?
Mirage develops and sells a network security appliance, Mirage Endpoint Control, that controls network access for every device that attempts to connect with the network.  Our market is currently known as Network Access Control, or NAC.

Last year the NAC market grew 100 percent to $225 million, and Gartner predicts the space will see similar growth in 2008. We’ve experienced this record growth first-hand, surpassing 500 customers and 170 channel partners in 2007. In fact, we recently won Frost & Sullivan’s 2008 Best Entrepreneurial Company Award for demonstrating the highest achievement in innovative product development, strategic business development and focused market strategy for a company with fewer than 300 employees.

Mirage has some very cool features that separate it from competitors in the NAC field.  Tell us more about them…
Our appliance frisks each device upon network entry to ensure compliance with policies such as patch levels, operating system versions and firewalls.  Once admitted onto the network, Mirage continues to monitor the behavior of each device to makes sure compliance continues. Whenever non-compliance is discovered, Mirage quickly quarantines an offending device, for example a laptop propagating a virus or worm, and provides a course for remediation.

Mirage’s NAC solution offers a “path of least resistance.”  Our technology is the easiest to deploy and manage because it is agentless, requiring no software on devices like laptops and PDAs; it deploys out-of-band, which means there is no re-architecting of the network, no single point of failure and no latency introduced; and it literally deploys in minutes — in every network regardless of flavor of switching infrastructure and operating systems.  Finally, our approach is patented.  We are currently in the third major release of Mirage Endpoint Control.

Mirage has a pretty neat distribution channel…what has the response been?
We decided early on that selling through a direct sales force was not the most effective way to scale our business.  Therefore, we architected the product and the company to support an indirect channel model.  The solution was designed to be easy to install, yet to provide a huge return on investment for our customers.  As a result, our channel partners could take credit for driving tremendous customer value as a trusted advisor.  The response has been fantastic.  We currently support more than 170 channel partners across 120 countries.

How has Mirage been funded so far?
We’ve been funded through venture capital investments from Adams Capital Management Inc., CenterPoint Ventures, Rembrandt Ventures, STARTech Early Ventures and Trinity Ventures. Our most recent round completed was Series C, and while we don’t disclose specific numbers, I can tell you that for companies in the NAC space, we are average or slightly below average with respect to the amount of money we have taken.

Is Mirage profitable?  What are the next hurdles to get there?
While Mirage is not currently profitable, we are moving rapidly in that direction. Based on conservative estimates, we should get there by July 2009.  Our core revenues have grown on average 30 percent sequentially over the past 5 quarters.  If this growth continues, we will get there much sooner.  The biggest hurdle is increasing channel productivity.  We have 170 channel partners today and as we eclipse 200 over the next 12 months, ensuring each is capable of effectively selling and supporting our solutions is critical.

We understand that you have a pretty strong tie to Penn State…
Penn State has been an important element in my career as well as in my personal life.  Many of my first memories are centered around Penn State Football.  My father was a 1950 Penn State graduate and over the years we have spent a great deal of time watching and listening to games together.  I attended Penn State and graduated in 1987 and 1991 (MBA).  My record as the longest tenured Drum Major in Penn State history still stands.  I performed a pre-game flip which is considered a harbinger for the outcome of the football game - and one of college football’s greatest traditions. [Ed. Note - Here are two great links to Greg's time at Penn State!  http://www.youtube.com/watch?v=QS0ne5BNE3Q and http://www.youtube.com/watch?v=0BBwmdMxBU4]
My family and I continue to stay close to Penn State.  We have created two scholarships there — one for the Drum Major and one in the Smeal College of Business.  A few weeks ago, I was honored to receive the Distinguished Achievement Award from Penn State’s Smeal College of Business. I try to get back to Happy Valley for 1-2 games a year and rarely miss a Bowl game. I also enjoy serving as a guest professor in the MBA program.

Where do you see the Company in 3 years?
Mirage will likely proceed down one of three paths: remain an independently operating company, go through an IPO, or join forces with a larger organization via acquisition.  Our primary focus is on the first path.  By ensuring we are driving customer value and continue to be profitable, we will have the freedom to decide Mirage’s future for ourselves.  If I had to look into a crystal ball and predict where we will be three years from today, I would guess that Mirage will become part of a larger security-focused company through an acquisition.