Regular publication has been halted for an indefinite period.

Tresorit takes on PRISM-provoked worries with encrypted cloud storage

As European businesses sort out the ramifications of the NSA PRISM data collection controversy, it’s not a bad time to be a startup specializing in secure cloud storage. Meet Tresorit, which encrypts your data and transports it to the cloud for storage.

The Budapest-based startup Tresorit was founded by star computer engineering grads of the Budapest University of Technology and Economics. It started building its secure cloud storage service with Java on Amazon Web Services, but decided its developers’ time was better spent brewing its secret sauce, not configuring servers and turning knobs, so they moved to Microsoft Windows Azure platform as a service.

Still, given PRISM-generated concerns about use of U.S.-company owned clouds, my first question to CEO Istvàn Lam, was “why Azure?” It is, after all American owned, and we all know now that American companies, regardless of where their data centers reside, can and do turn over customer data when mandated to do so by U.S. Law. His response: Tresorit applies AES-256 client-side encryption to files while they’re still local and then uploads them to Azure. Then there are additional layers of security, but the key takeaway is the encryption key never leaves the user — neither Tresorit or Microsoft has it, so neither can “see” the customer’s stuff, said Lam, who studied cryptography in school. Presumably, the NSA can’t either.

Tresorit was even willing to bet on that security, offering a $10,000 hacker bounty to anyone who could penetrate its defenses. It set up a test bed for this challenge — populated with virtual (fake) user data and offered all takers admin rights to take go for it. That challenge was issued in April when the service went to public beta and to date no one has claimed the prize.

Founded in 2012 — before Lam even graduated — the company has grown to 27 employees, 14 of whom are very recent hires. The target market is small and mid-sized companies but Lam has his eye on the enterprise as well. Competitors in this arena include Spideroak and Wuala.

Here’s the thing: even without government data collection worries, everyday business people are much more concerned about the security and privacy of their data. A vendor that can offer them an easy to use way to lock up that information and transport it to a cloud has a huge market opportunity ahead. Tresorit has the cryptography talent to make a go of it, and that’s why it was selected as one of GigaOM’s ten Launchpad finalists — out of nearly 90 candidates.