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Israel-based startup Porticor launches this week with technology aimed at giving enterprises a way to encrypt data held in cloud computing services, including those from Amazon and Rackspace.

Porticor Virtual Private Data is focused on protecting data at rest in cloud-based computing centers where customers rent disk space or servers, says Gilad Parann-Nissany, Porticor’s co-founder and CEO. What Porticor is doing that’s distinct is relying on a so-called “split-key” method in which the service to encrypt and decrypt doesn’t work unless both pieces of the key are together.

The enterprise customer holds what Porticor calls the “master key,” and the idea is to foster trust by putting the customer in complete control. “We don’t have the customer master key,” says Parann-Nissany. In fact, the service provider doesn’t even see the master key in the encryption method that’s applied.

The standard encryption offered is AES 256 or Blowfish, with a maximum key length of 2048 bits. Porticor is operating a Virtual Key Management Service, with pricing ranging from $27.50 per month to about $411 based on volume. The service could be provided by others as well.

The assurance, tax and consulting firm McGladrey & Pullen LLP is said to be trialing the encryption service with Porticor.

Parann-Nissany says the Porticor technology, which includes a Virtual Appliance as well as agent software, has been shown to work with Amazon Web Services and sales to Amazon customers have begun. Closer technology integration with Amazon is said to be under discussion. A partnership with Red Hat is also in the works to embed certain technologies, while testing with OpenStack and Microsoft server platforms and Microsoft services has been successful, Parann-Nissany says.

Headquartered in Tel Aviv and founded in 2010, Porticor is funded by Glilot Capital with about $1 million. Prior to Porticor, Parann-Nissany was global CTO of Small Business at SAP, and he says it was there it hit him that one main challenge in cloud computing is the trust factor in applying encryption. “It was non-trivial to solve,” he says, which led to his idea to start Porticor.

Among other Porticor co-founders are its CTO Yaron Sheffer, formerly technology manager at Check Point (and he’s also currently co-chair of the IETF IPSECME committee), as well as Ariel Dan, vice president of sales and marketing, whose background includes stints at Websense and Port Authority.

Ellen Messmer is senior editor at Network World, an IDG publication and website, where she covers news and technology trends related to information security. Follow her on Twitter at www.twitter.com/ellenmessmer

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More Stories By Gilad Parann-Nissany

Gilad Parann-Nissany, Founder and CEO at Porticor is a pioneer of Cloud Computing. He has built SaaS Clouds for medium and small enterprises at SAP (CTO Small Business); contributing to several SAP products and reaching more than 8 million users. Recently he has created a consumer Cloud at G.ho.st - a cloud operating system that delighted hundreds of thousands of users while providing browser-based and mobile access to data, people and a variety of cloud-based applications. He is now CEO of Porticor, a leader in Virtual Privacy and Cloud Security.