Youngblood: A little Minnesota computer security company got a boost from a former rival and Microsoft

Shavlik Technologies, a small White Bear Lake software development firm that specializes in computer security systems, received calls this spring from the U.S. Postal Service in Washington, D.C., and the Redstone Arsenal in Alabama.

Both had heard of the company's security products and wanted to talk business. The result: an order from Redstone and ongoing negotiations with the postal folks.

All of which leaves the larger question of how an obscure Twin Cities company with annual sales of less than $5 million came to the attention of such high-profile prospects.

The answer is that founder Mark Shavlik, a veteran of the big-league software wars, had what you might call an even higher-profile referral service: an outfit called Microsoft Inc.

The referrals grew out of Shavlik's assignment last year to develop security products for about 100,000 computers and servers in Microsoft's internal network. It seems that a former Shavlik competitor had taken a key security position with Microsoft and had recommended him.

As a result, all of Microsoft's desktop computers now carry Shavlik's security software, and the chore of adding it to the army of Microsoft servers is well under way.

The products developed for Microsoft -- which Shavlik continues to own -- offer such applications as rapid validation of individual computer security, automated security auditing tools and a database that instantly updates security information for Microsoft products.

The referrals from Microsoft aren't the only good news, however. In June, Shavlik received a notice from Microsoft's Security Response Center in Bellevue, Wash., lauding his high-speed security-validation product.

Center officials were "so impressed with this application that we are planning to host [it] on Microsoft.com," the company's Web site, wrote Eric Shultze, security program manager at the Security Response Center.

'Key tools'

He called the application, along with a supporting database management product, "key tools to be used by Microsoft to assist customers with staying up to date on security issues."

This will not send revenue streaking immediately skyward, however, Shavlik said. The reason: The applications are to be given away free to Microsoft customers.

"But they're stripped-down versions that will carry our name," he said. "We're counting on that exposure to boost sales of all our security products in the future."

Indeed, he figures the lift will quickly reverse a revenue decline that accompanied the recent dot-com debacle, which damaged many of his clients and hammered his 2001 sales forecast down to about $3.4 million. That compares with a peak of $4.4 million last year.

Shavlik, 39, started the company in 1993, two years after he'd shed the golden handcuffs of his employment as a high-level software engineer at Microsoft and went looking for less intense and stressful pursuits.

"I remember one time in 1988 when I stayed at the office an entire weekend without sleep to meet a deadline," said Shavlik, who led the team that designed the file system tools for the Windows NT operating system. "With a wife and young son at home, that's when I started thinking there had to be a better way to make a living."

With about $5 million in stock awards at stake, however, Shavlik had to wait until he was vested to consider leaving. Even at that, "I probably left several million on the table by not staying," he said.

"But if I hadn't quit, I'd probably be living all by myself in a small apartment in Seattle right now."

Instead, he moved his family in 1991 to the Twin Cities, which he'd visited only once. "But everything I heard about the lifestyle and the education told me it was a great place to raise a family and start a business," he said.

'Industrial strength'

Shavlik spent two years working as a software engineer at Northwest Airlines and Medtronic while he tried to get his consulting business going. He specialized in what he calls "industrial-strength" projects -- those requiring high performance and reliability.

For example, his company has done seven projects in the past five years for GMAC/RFC, the consumer finance arm of General Motors. The projects involved developing secure, reliable, high-speed online transaction systems to serve both customers and loan managers.

"These projects requiring a high level of security led us to our current focus on security issues," Shavlik said. His client list includes the bulky likes of the Defense Department and its Advanced Research Proj ects Agency, for which Shavlik developed software to identify online activities that point to a spy or sabotage threat.

Competitors also have come looking for help. For example, Shavlik Technologies jointly developed a computer firewall system for Windows NT with Secure Computing, a major developer of computer-security products. Later, Shavlik added a proprietary product to audit the firewall system.

While industrial-strength projects remain the majority of the business, Shavlik said, security software accounts for about 40 percent of revenue, up from 10 percent five years ago.

The biggest client in either category is Microsoft, which prompts the obvious question: How would the court-ordered breakup of Microsoft, which recently was rescinded, have affected its relationship with Shavlik Technologies?

Shavlik breathed a gusty sigh of relief: "Having to deal with two or more entities instead of just one on the approval process would have been next to impossible,' he said.

Dick Youngblood can be contacted at 612-673-4439 or at yblood@startribune.com.