Media Week NYC theCUBE + NYSE Wired | Steven Elliott, ADAMnetworks

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Steven Elliott

CFO

ADAMnetworks

play_circle_outline Secure Internet Connectivity: ADAMnetworks' Solution and the Benefits of Default Deny-All Network Edge

play_circle_outline Impact of edge devices on cybersecurity

play_circle_outline Focus on phishing prevention and ransomware protection

play_circle_outline Maximizing Client Engagement with adam:ONE Through Strategic Deployment and Rollout Process

play_circle_outline Balancing Revenue and Growth: The Importance of Endpoint Security and Customized User Experience for Cyber Defense

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Steven Elliott, ADAMnetworks

Steven Elliott

CFO ADAMnetworks

ADAMnetworks, an 11-year-old company, focuses on securely connecting to the internet through their solution, adam:ONE. This default deny-all network edge solution uses DNS filtering to allow connections to trusted websites, reducing potential threats. They work with security providers like Palo Alto Networks and Cisco Umbrella, aiming to complement existing solutions. ADAMnetworks has doubled its staff to 25 employees, expanding into the US market with clients on multiple continents. They have raised seed funding and plan a Series A round in 2025 for further ... Read more

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What problem was ADAMnetworks trying to solve when they were founded? add

What led to the positive impact on the business side with the increasing popularity of edge devices, and how do customers react to this evolution in technology? add

What are some of the challenges and considerations involved in deploying a network edge solution in the market? add

What is the process for scoping the magnitude of the engagement with a new bank and client? add

What are some of the challenges organizations face when trying to deploy new cybersecurity solutions and how can those challenges be addressed? add

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Steven Elliott, ADAMnetworks

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>> Hello, welcome back to theCUBE's coverage here in New York City on the show floor of the New York Stock Exchange. This is theCUBE's location at the NYSE. This is our East Coast access point for access to information experts and all the people making things happen. Our next guest, Steven Elliott, who's the CFO of ADAMnetworks. Steven, welcome to theCUBE.

>> Thank you for having me.

>> Thanks for coming on here. We're Wall Street. It's where business and technology intersect, theCUBE in Silicon Valley here now in New York City at the NYSE. The business conversation is all about AI obviously, but this week, climate week at UN, the conversation opens up into your world, which is, "Okay, I got to govern this. I got to explain the AI. I got to make sure we're safe and secure and defend against all threats foreign and domestic, so to speak." Cybersecurity is a hot topic, it's a data problem and a risk management problem. And this is really when you boil it up, it kind of comes into those categories. You've got to have the governance on the data. You also want to secure it. The surface area is now very porous and so defense has changed. The bad guys are getting stronger. The good guys got gen AI helping them out. So you're seeing SOCs change, SIMs change, you're seeing the personnel, the craft of cyber change. So you got the personnel, the process, the technology. It sounds like a digital transformation equation. Welcome to theCUBE.

>> Thank you. Yeah, also sounds slightly terrifying, so...

>> Explain ADAMnetworks, what you guys do, the business model real quick and we can jump in.

>> Yeah, so ADAMnetworks is... it's 11 years in the making and started trying to solve the problem of how do we confidently connect to the internet that only we want to connect to. The internet is obviously a very big thing, a billion plus URLs and growing every day. Most of it malicious depending on how you measure it. So the idea was from our founding engineers was asking the question, why are we spending computing power tracking the bad when most of the bad isn't something we need to connect to or worry about anyway? How can we spend computing power noting and connecting to the good however we define that on a per device basis so that we can allow the administrator to sculpt a unique version of the internet for each and every device? So then it's a default deny-all network edge solution. It can be deployed in the cloud and can be deployed on-prem. I run it right now on a forced on VPN on my phone, deployed in a lot of different models. But basically the idea is how can we just allow the good to connect and then by default the bad C2 nodes just simply don't exist.

>> Yeah, so you guys actually creating policy around access and then verifying connections.

>> We're allowing... so the critical pieces of the tech, it's a DNS filtering solution. So we use DNS as a rooted trust. There's a problem with that or there was a problem with that because DNS can be leaking. So what happens if you have a device that's using a direct IP connection and not using DNS lookup? So that's solved in part by one of our patents called Don't Talk to Strangers, DTTS. So when you're behind adam:ONE, any device that's trying to make a direct IP connection must first go through the single door of DNS, verify that, and then and only then if it is verified by the policy for that device is a connection made. So that shuts down shadow IT, it shuts down the leakiness of DNS, and then we're giving complete visibility. So because we sit on the wire and the network edge, automatically you have complete device inventory of anything that's trying to connect to your network.

>> You're building basically a virtual perimeter or physical perimeter by the collection of devices.

>> Yeah. And-

>> network.

>> And rely on the administrator to do that. They see it in real time immediately. And oftentimes there's devices that are connecting to the network, they had no idea. They get to see that immediately when we start rollout.

>> It's got a processor, it's got multithreaded on it, malware opportunity. So take us through the evolution on the business side because we're seeing on our research clearly that the edge devices are exploding in population. We're seeing a lot the form factor change from wearables to even multimodal computer vision cameras to whatever, light bulbs. I mean, everything's going to have an IP address. As the device tsunami continues to come, how does that impact your business and how does customers react to that? What's their play?

>> It's very positive, especially since we don't have to download the software on an end point. So anything that is IoT that can live behind adam:ONE very, very well. I came briefly just in terms of my own association with Adam. I came to ADAMnetworks running a financial services company seven years ago trying to solve for phishing. And so we were starting to get more sophisticated phishing emails coming into our network. And I'm not a technologist, I'm a business guy, but I understood very quickly that if my staff and my company is one bad click away from opening a C2 node and that's a problem. And I'm not sleeping very well at night. And a lot of the answers that I was getting from SSPs were essentially, "Well, we were happy to do seminars to help train them to not click on the link." And I said, "That does not make me feel a lot better."

>> Exactly.

>> So as I met the team at Adam at that point had just, this is 2018, they had just taken the product live after six years of development. It just made way too much sense to me. I was too dumb from a tech standpoint to know the difference to say why would I worry about the bad that I don't know about? Why don't we just cut that from the root? And so the conversation, unfortunately, the bad actors which are multiplying are doing a tremendous amount for our business. And so we're happy to serve the clients in that, but we also lament the fact that the state of .

>> And the AIs help certainly the phishing business and ransomware as a service is growing. The middle networks are getting disrupted, reconstituting themselves, moving very quickly. Does that really solve that problem because it sounds like phishing would be eliminated then?

>> There's no solution that... there's no silver bullet. We exist in an ecosystem and we deploy and work with other partners. But when you can move to basically a posture that we assume you are breached and that's position one, then basically you take your attack surface has been reduced depending on how you want to do math. If your average organization needs about 15,000 URLs and there's a billion plus URLs on the internet, you've reduced your attack surface by 7,000 times. So our goal is to make the attack surface so small that you've exhausted the resources of your attacker. So yeah, we encourage people, we encourage... if my daughter at home gets a phishing link on her adam:ONE phone, the first thing I say is, "Let me see it. Click on it. Let me see it. I want to see it," and it doesn't work. Not because we know the link is bad.

>> It just hasn't gone through the DNS.

>> It's just not part of that device's version of the internet.

>> I mean, this is basically the concept that makes total sense. What's the reaction on the customer side? Because you have them investing in massive security red teams, blue teams, SOCs, SIMs. So what's the productivity look like? What changes on the customer side?

>> A lot. So part of it is, I mean, it's been a five-year journey on the business side to tell the story and to actually go to market. And part of that journey is just learning how to talk about our product and what people are trying to solve, which ransomware is certainly a big one. So part of the challenge initially was number one, who are you? And so that's obviously the challenge that any incumbent has or any upstart has coming into a market. But then the second, third-order questions are really around deployment. We're not seeking necessarily to supplant other network edge providers. We play nicely with others. So there's a lot of questions around that. And then there's just questions around which are really good questions of how big and how wieldy is your stack getting? And so you have to be very clear about what... and listen a lot about what do you actually care about. Where are you at in your procurement cycle? Where is your spend? You may love our solution, but you're not going to have budget for it for 18 months. And so that's okay. Yeah, it's really-

>> And by the way, they have tons of platforms.

>> Correct.

>> That've been buying every tool in the planet, every platform. I mean, I was talking to a customer and they said to me, "John, one of their biggest things that we have here is that if we had a breach and it started to take hold, we can't unplug." They can't even get off the internet.

>> That's right.

>> I mean that is mind-blowing because it's so convoluted in the systems, they can't actually shut down because it's critical emergency and then mitigate, triage, and then roll back and put things back in place.

>> That's right. Yeah.

>> Because the systems aren't talking to each other and it's like, I mean, we all saw what happened in this past year. Recovery is a problem. So defending then recovering. So resilience is a huge focus. I think that would be a wake-up call for you guys to get at the front of line on everything.

>> Yeah, it happens. Unfortunately, we had a... it's a client, it's a firm that we did a partial deployment on three years ago and a quote was out and our conversation's been stalled because they were ransomed a week ago and so... on a part of their network that we were not protecting. And it's not to say it cannot say conclusively that had we been deployed without knowing all the details, but the bottom line is our most motivated buyers are the ones who've gotten religion around the fact that this includes them too. And I think that's part of the-

>> And by the way, ransomware sees a sucker, they'll come back and go after it again.

>> Just goes right back up. So we have one client, their multi manufacturing concern, we were brought into the conversation three years ago and as we were quoting, they were in the middle of a breach. And so basically what happened was we deployed adam:ONE at their network edges in their facilities. They lost one weekend shift, stay connected to the internet. We didn't know the infected machine, we didn't have to. So they stay connected to the internet and only that which was verified and good and necessary, continued to connect. They lost one weekend shift, didn't pay the ransom, and the controller on one of their manufacturing floors that was still running and to this day is still running the same unpatched Windows XP system, we've tracked somewhere on the order of 5,000 reinfection attempts on that machine and we watch it. We see it on the logs, it just can't connect. And so that's what we can do.

>> It's an alternate quarantine.

>> Correct.

>> I mean you guys are innovative and you guys take the policy of guilty until proven innocent.

>> That's right.

>> I mean, but that works.

>> And it's the same-

>> That's a protocol that will work.

>> It's the same policy that I use in protecting my children.

>> Yeah, exactly.

>> It's like this is how we do not talk to strangers period. And so why would we not use that protocol for the devices that are-

>> Okay, so what do you guys are doing now? Because obviously it's great value proposition, again, that would for me front of the line because everyone's standing in the line, "Hey, I got a solution, I got a platform. We got another tool in the tool shed in cyber's like..." I mean, I bought something three years ago. Is it still deployed? I don't even know what I have on my network.

>> That's right.

>> So there's a lot of congestion, but the contention is to solve the problem.

>> Yes.

>> What are you guys doing about it? What's the business plan?

>> Business plan is, so we were already deployed on about 2 million devices, small, medium-sized enterprises. We just went into the banking sector this first quarter with our first banking client. So we're continuing to grow validation with larger and larger, more complex deployments. We have a licensed technology partner program, LTP, so we ultimately do not want to be a distribution company. We'll distribute insofar as we have to build a business case, but we want to resell and license to other MSPs and MSSPs. So that program is growing rapidly. And then we're in the early stages of making inroads into USG.

>> Is the objection too good to be true or is it people just like, why hasn't someone thought about this or what's the secret sauce?

>> It's some of that. And then it's also a little bit depending on the audience, it's also a little bit of somebody hears default and their blood pressure spikes and they say, "You're going to break everything, so no thanks."

>> They're not ready for it.

>> They're not ready for it. And then it's also the you can see sometimes the overload of you have eight tools like you said, that I'm not even fully using and now I'm supposed to listen to you guys. So there's just a lot of congestion and there is a two good to be true element to it. How have you actually gotten this to work? And the answer is a really talented group of engineers who for six years kept working on it.

>> Give us some history of the company. Where are you guys based out of, what are you guys working on now? Status of the company? Give us an update.

>> Yeah, the company was founded in 2013 by David Redekop, he's chief engineer. And we have... our staff has doubled in the last year. We've got about 25 employees and that's continuing to grow. Yeah, we're expanding into the US market and have clients in multiple continents and-

>> Business is good?

>> Business is good. It's very bright.

>> Good. A lot of dry powder?

>> One of the reasons I'm in New York, so you can never have too much sometimes.

>> Yeah, it's a good time to raise again the defense side, the threat intelligence market, having the intelligence but actionable capabilities. At the end of the day, you can have all the intelligence you want.

>> That's right.

>> There's information sharing, but if you don't have that mission control, you can't detect and respond, which is the key ethos of defense, you're already built in the detection by assuming strangers.

>> Yeah. And basically the idea is we help win the cyber war by simply removing your assets from the battlefield. So it's almost in some respects, because we've been trained... I used to be in the military, so the idea of who's the adversary, where do I fight the adversary, the ultimate way to win is to achieve your objectives without having to fire a shot. And that's what we want to do. Because at the end of the day, and it's not to say that threat detection doesn't have a role, again, there's an ecosystem of all of this, but yeah, we feel like unfortunately the threat ecosystem is going to drive adoption of a model like ours.

>> What's the hurdles for you getting the word out, awareness? Is there agent involved, agent technology? Does that slow the boot up process? What's the technical product requirements and where's the innovation?

>> Yeah, I mean it's basically the first step is just understanding what the client ecosystem is and what they're trying to protect. So do they want a cloud deployment exclusively? Do they want an on-premise deployment? Do they want some combination of the two? So honestly, one of the biggest hurdles sometimes is in order to understand where the egress points are, first and foremost, your prospect and client has to understand that. And so oftentimes when we're at the beginning of the process, sometimes there's a little bit of a sheepish conversation around, we know that there's some configuration things we need to clean up so that we can have real clarity on the doors. And that's an unfortunate problem we can't solve. But once it is solved, then we're in a position to help.

>> Talk about what you guys are investing in right now. Obviously, what round of funding you guys at now?

>> Yeah, we're closing our seed and then looking towards Series A in 2025.

>> Okay. Okay, cool. That's awesome. Any investors out there, check it out. Another opportunity to solve the problem. On the go-to-market, take us through the use cases of the customer. Okay, I'm interested. You got my attention. All right.

>> Right.

>> Yeah, I love it. How do I... What do I do? Scope the magnitude of the engagement.

>> Yeah, so we'll start with the POC and usually I'll just walk you through how it worked with our last new bank and client. So first what they wanted to do was they wanted their own sandbox in the cloud so that their CISO could spend a weekend trying to break it.

>> That's good. I love CISOs who are red teaming.

>> Which is great. So once he was convinced that DTTS worked and that it did what it said it was going to do, we deployed. Then it was, "Here's your network. We need network architecture. We need to know how many endpoints, how many devices. Are we protecting phones? Are we protecting multi-homes? How many branches are we protecting? Where do you want to start?" So the client tells us where they want to start. They give us that architecture. Then we come back with a quote and what we call a smart rollout plan because the ideal is not to deploy adam:ONE and then immediately go to a full zero trust default deny-all posture. That's where you break things. The first thing that we do is we like to turn on adam:ONE for between 30 to 90 days in listen mode. So what we're doing is, number one, we're capturing all your devices that are actually connecting to the internet and then we're capturing what is a "normal traffic pattern" for these different parts of your organization. What does a normal traffic pattern look like for sales? What does it look like for your ATMs or whatever it is? And then from there the CISO has the freedom in their team to ratchet down to a posture of least permissiveness without breaking anything. And that process, depending on how fast they want to go, they can be from POC to fully up and running with Adam usually about 120 days.

>> So not a heavy lift on deployment. Once you understand the architecture, get the POCs. That's really more about confidence and you guys getting some working data around just the infrastructure that they have.

>> Correct. And in that case they were also running Palo and Cisco umbrella and they do not have to disconnect from any of those. We can run in line with those or outside of those. So we play well with others.

>> It's interesting, the endpoint, there's like 13 categories in security these days. Endpoint's one of the hot ones as you mentioned that. You guys solved that problem. And so I can imagine that there's been a lot of demand for this.

>> Yes.

>> How do you speed up the process and how do you mitigate that fear might be unfounded around things breaking in and what are they afraid of?

>> I think they're afraid of an over-reliance on a company they'd never heard of. Very few people I don't know have ever gotten fired for using a billion dollar company and we're not that yet.

>> Until they get breached.

>> Correct. So you're fighting that. You're fighting the confidence factor, which we totally understand. You're fighting like we talked about, just the fact that there's a plethora of tools and I'm already understaffed in terms of what I'm doing. So how do I... theoretically I want to do it, but how do I-

>> Resourcing app.

>> Resourcing app and then it's also you have to have the successful deployments that we've had, which all of our... I mean, I would consider all deployments to be successful, you have to have technology buy-in from your technical team and you have to business buy-in because where we've seen gaps is if you just have the technical buy-in and you have the board or the C-suite just sort of nodding their head, the problem is you have a gap in culture because our product works best like any product when you have cultural buy-in that says we're writing the check and we're deploying this because that's an outward expression of the fact that we get the landscape we're living in and we want to take those steps. If we're just considered another tool in the stack, then it can be underutilized I should say.

>> Yeah. One of the things, I'll come to the user experience, potential impact, if you want to go talk about that, but you brought up a good point that we see where people fail and where people succeed in cyber. On the defense side, when they adopt an IT mindset, "Oh, we got a new stack, we're good," but they don't change the process. So I think this is your culture point.

>> It's culture. It's huge.

>> You got to have the new capabilities, aka ADAMnetworks, adam:ONE, and then process. This is how we operate.

>> Yeah.

>> That's operational. That's not about technical. It's both theaters.

>> That's exactly right. If people have to have buy-in and have to... and not from a position of fear, you don't want to inject a persistent anxiety into your organization that China is right at your door even though they kind of are.

>> You already got the anxiety. It's level of anxiety.

>> Yeah. How do we empower. And obviously you can deploy Adam or any other solution and if I don't have good security hygiene and I pick up the phone and I just wire money to whomever, well that's a problem. There's no solution that can fix that. The human being, we're always the weakest link in the solution in the chain and we just want to help people, especially in a world of AI and especially when you're talking about phishing and ransomware, it's so unfair to expect a human being to say you're one click away from bringing the organization down. That's just not fair. And so we can certainly help solve that.

>> Some of the user experience, obviously working at home, that's a whole nother challenge. Devices, I got my iPhone or Android phone, I've got my work apps on there. Certainly it's an endpoint. Is there disruption there on the user side? What happens to the user? Does it have a mode that senses when they're in work mode?

>> You can design different policies around that. There's a whole host of tools on the dashboard in terms of how you sculpt the experience. But to give you two broad spectrum examples. So again, the idea of sculpting your own unique version of the internet for each individual device. My HP printer is on a very narrow version of the internet. It cannot talk to Bank of America right? It is on a static white list that I can see from my dashboard from anywhere and it can talk and get software updates. That's it. My phone, my laptop is on what we would call the most aggressive version that's much more driven by AI and machine learning because we're... as I'm going to new places and using new apps, then I have to leverage the robots to go in front of me because they may not have been there before. So is that safe?

>> They go theCUBE AI, may be the first time to check out our stuff that might not be white listed.

>> Correct. But we use... and this is a component of the stack. So we are very much like threat detection is really important. Part of our product is a product called DNS Harmony where we think that the only better or the best threat intelligence feed is an aggregation of all the best threat intelligence feeds. So you can use DNS Harmony for a device, which is a block listing approach, but it aggregates all the top threat intel feeds. But then we use DNS Harmony as a component to train our robots to basically say, yes, this is updated by the second to help make decisions as to whether or not a new place you're going is safe or not. And at the end of the day, we're always making this decision with any product between convenience and security. If I put my phone on a static white list and I could only go to those devices, that is a very secure posture and I would quickly have a brick that I would not be able to use. And so we're helping people at least make that risk management decision for themselves. We're not here to tell you what's "good". You get to make that decision and you get to turn the dials as to how tight that posture is for your network.

>> Yeah. One of the things that comes up a lot is third-party services like APIs, web pages have a third-party element to it. They're coming from a foreign device. What if my site was infected and becomes white listed and I'm pushing malware through my URL?

>> Yeah, that's a risk. And that's where the threat itself feed. Again, we can't posit that we're going to stop every... there's always an attack factor. There's always a way to get through. We do have some ways that we can help address that, but at the end of the day, it's about attack surface reduction and that's why some other tools working in concert with ours can be really helpful.

>> Okay. That was my next question because this comes into, you're not a replace all.

>> No.

>> You are a integrate into the environment with layered approach by one, focusing on the surface area and letting other tools be best of breed in their class if we need them.

>> Correct. That's exactly right.

>> Okay, cool. All right, well that sounds awesome to me. Any room in your next round for theCUBE ventures? I'm only kidding. We don't have a venture fund. If we did, we would invest. Great solution. Give a quick commercial for the people watching, what you guys are looking for and the funding, hiring, customers, value, pros... give a quick pitch.

>> So we are finishing up a seed round right now. That's again one of the reasons I'm meeting with some folks here. So finishing up another two and a half million a seed, looking at about 10 million Series A for next year, we are seeking to grow our deployment and client services team. So we'll probably be adding at least a dozen hires over the course of the next six months. If the only thing worse than not getting the business is getting the business and not being able to do well with it. So that's part of the reason for investment is we want to run ahead of the demand that we're continuing to see grow.

>> It sounds like you're in the super seed category with product market fit now bowling on the front end.

>> Yeah, we're weird because people look at us and it's just like, "Wait, this is 11 years old and you've got clients?" It's the .

>> So was self-funded by the founders?

>> Yeah.

>> Pretty much. Yeah. So that's what usually happens on the good deals.

>> Exactly.

>> So you're a seed bridge basically into an A.

>> You got it.

>> Once you get escape velocity on the A, then you'll raise more money. So you guys take a more conservative approach with the seed. Is that the-

>> That's the idea. Yeah, that's the idea because we have so much in the pipeline right now, in the sales pipeline. It's very chunky and that's the best money you can have. And so we don't want to raise any more than we have to, but at the same time, that's my job.

>> You're generating revenue.

>> Yes.

>> You've got customers, you got product market fit, you understand the landscape, the world is on tailwind for you, this market obviously.

>> Yeah, that's correct. That's correct.

>> All right, well thanks for coming on theCUBE. Appreciate it.

>> Thanks for having me.

>> All right, getting all the action. Again, defense is one of the biggest hottest areas in cybersecurity. Again, it's securing the data. It's a risk management. New approaches are coming online, they're happening here on theCUBE. We are here in our NYSC studio location. I'm John Furrier, your host of theCUBE. Thanks for watching.