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Christian Renaud sees a lot of competitors in the data security industry who are “hunting elephants” in their search for major corporate clients. He’s content with much smaller, though still profitable, game.

Renaud, who previously held key positions with Cisco Systems Inc., began working with Palisade Systems Inc. in October as a strategy consultant. In April he was named the company’s president and CEO, and is leading Palisade into a rapidly maturing market niche known as data-loss prevention. Rather than focusing on the “elephants” – the Fortune 1000 companies – Palisade is finding significant growth in providing those services to industry sectors such as health care, education and local governments.

“It was about five years ago that I bumped into Palisade at the entrepreneurial conference downtown (in Des Moines) at the convention center,” Renaud said. “They were working on Web filtering and protocol filtering, for example, stopping kids (using school computers) from going to porno Web sites or from doing illegal file sharing.”

Data loss is a growing problem for companies of all sizes. The Privacy Rights Clearinghouse last year identified more than 215 million records belonging to U.S. residents that have been compromised due to security breaches. The average total cost to companies is estimated at more than $6 million per incident.

While he was with Cisco, Renaud was looking into data-loss prevention, “which uses the same sort of technology to look into the (data) traffic that’s leaving or coming into the company,” he said. “You’re looking for things like Sarbanes-Oxley violations, HIPAA (health-care data privacy) violations or other financial strictures which regulate what kind of information can come and go and when from a company.”

An Urbandale native, Renaud holds a bachelor of science degree in business and management from the University of Phoenix and has pursued additional graduate business studies at the Kelley School of Business at Indiana University. Prior to joining Cisco in 1996, he formed an emerging technology analyst firm. While at Cisco, he worked in several positions related to emerging technology, most recently as chief architect of networked virtual environments.

Quality-of-life considerations led Renaud and his wife to move back to Iowa. “We were living in Palo Alto at the time and decided that wasn’t the best place to raise our first daughter,” he said. “We came back here for a relative of mine’s wedding and my wife said, ‘Why don’t we move here?’ I went to high school in Urbandale, and I was open to that.” He and his wife, Janene, now live in Johnston with their two daughters.

Founded in 1996 by Doug Jacobson, an Iowa State University computer engineering professor, Palisade had focused in its first decade on marketing a suite of products that defend against internal network threats and prevent unauthorized leaks of corporate intellectual property.

Palisade’s clients in Central Iowa range from companies as large as Meredith Corp. to organizations as small as the Johnston Public Library. About 90 percent of its clients are in the North American market and outside Iowa, though it also does some business in Asia, Europe and South America.

The exchange at the entrepreneurial conference led to Palisade’s development of its newest product, PacketSure. Using that product, a company can detect – and stop – personal or restricted information from leaving its system.

To sell a company on the product, Palisade typically offers a free five-day assessment, followed by a detailed confidential report.

“One mortgage company we did an assessment for in five days had almost 171,000 personal financial information violations, 26,000 instances of personal health information leaving the organization, 11,000 Social Security numbers and 363 credit card numbers transmitted in the clear (without encryption),” Renaud said.

In most cases, the data breaches are unintentional, from “fat fingering” an incorrect e-mail address to using the wrong procedure for sending data, he said. Often, a business has no idea how massive its data loss really is, and may not believe the numbers could be true, Renaud said.

“Then you start showing them examples of specific violations that occurred, and they have an aha moment, and lots of four-letter words fly. That’s the moment of clarity; then they can turn to management (with the data).”

A beauty of the niche is that few companies seriously consider cutting back significantly on computer security, even in the worst recessions, Renaud said.

“This is not a luxury item; this is more of a necessity item and it has a very clear return on investment if you talk about regulatory strictures you have to adhere to, or if you have infrastructure you want to make sure you get the best utilization of,” he said.

Renaud said he expects the maturing data-loss prevention market will experience consolidations in the next few years, though it’s not clear whether Palisade will acquire other companies or be acquired itself.

“I put us right at the fulcrum of the teeter-totter right now,” he said. “If you look at the larger market as the yardstick, we’ll be acquired by a larger player. But oftentimes the small to medium business and vertical markets are counterindicative of the larger markets, and we might be a consolidator, because there’s lots of attrition happening in this space.”

Palisade, which ended the first quarter with sales up 40 percent from last year, could become profitable by the third quarter, Renaud said.

“We have been profitable in the past; we haven’t hit the stride where we’ve been consistently profitable,’ he said. “I can see that coming in the third quarter.”