Back in October 2009, Palisade Systems announced its first data loss prevention (DLP) offering geared toward managed services providers. The company, which targets the SMB market, has since received a boost from an unexpected source: Connecticut’s attorney general’s office. Here’s how.

The AG’s office in January 2010 sued a managed healthcare company for “failing to secure private patient medical records and financial information involving 446,000 Connecticut enrollees and promptly notify consumers endangered by the security breach,” according to the state.

The HITECH Act, a health information technology-related law passed as part of the economic stimulus package, authorized state AGs to enforce the Health Insurance Portability and Accountability Act privacy and security provisions. HITECH and the Connecticut suit have combined to spark interest in DLP among healthcare customers, noted Christian Renaud, chief executive officer of Palisade Systems.

Some healthcare organizations have opted for Palisade Systems’ traditional PacketSure DLP appliance. Renaud said large healthcare systems and hospitals have purchased multiple appliances in some cases, with deals in the $80,000 to $150,000 range. Smaller medical centers and satellite offices, however, are going the MSP route, he added.

In those cases, customers go with Palisade Systems’ PacketSure Managed DLP. MSPs can host the product as a VMware virtual machine offering.

In general, the federal initiative to promote the adoption of electronic health record (EHR) systems among the nation’s physicians and hospitals also raises the profile of DLP. Some EHR solutions are hosted in the cloud, which raises security concerns.

“SaaS providers doing it all in the cloud need some sort of story about how they are keeping their data secure,” Renaud said.

With that in mind, Renaud said his company is discussing DLP with EHR vendors he declined to identify.

Palisade Systems, meanwhile, is readying a SaaS solution of its own: the SaaS version of PacketSure is in beta.

Renaud said the company’s PacketSure 8 code base, the latest version, is replicated across its on-premise, MSP and SaaS products. Features included in PacketSure 8 include a new reporting engine and contextual analysis.

In addition to healthcare, financial services and state and local government are active markets for Palisade’s DLP offerings.

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