Putting tests to the test

Caveon audited South Carolina's high school assessment program, which serves as the state's high school exit exam. "We want to make certain it is fair," Terry Siskind, assessment director for the South Carolina State Department of Education, says on the Web site.

A real test

But checking for fairness can be a daunting task. Caveon notes that about 20,000 North American testing programs administer nearly 125 million tests for qualification, selection and advancement of people in education and business.

That's where its founders saw a need for improved test security. Veterans of the testing industry came together to form the company in early 2004 — the name coming from "caveo," Latin for protection and security — and now the company has about 60 customers. They include boards, institutes and associations overseeing tests for surgeons, lawyers, Certified Public Accountants, nurses, hazardous-materials managers and others, including school districts conducting K-12 student assessments in 12 states.

The Institute for Hazardous Materials Management tests about 800 people a year. The state of Texas tests about 5 million students annually.

"That's been probably the most pleasant surprise for us, that the models we use don't have to be adapted a whole lot," Foster said. "A little bit, but not much. We can deal with a test where only 100 people have taken it versus one where 5 million have taken it. The models don't change much."

Charges for the services vary from under $1,000 to analyze data for a lawsuit to "hundreds of thousands" for Texas, Foster said.

The company turned its first profit in 2006 on sales of about $2 million, and it is expecting to grow 50 percent to 80 percent during the next two or three years. That would be fine for many young companies, but Foster admits it has been slower than originally expected.

"Security is not a pleasant topic. Customers tend to come to us when a breach has occurred, not because they really want to work on security. They really want to work on it after a breach," he said.

"By going to a security company, you acknowledge you have doubts about your own security. You have to get past that barrier. And there is a positive message in that, one that many of them are not used to saying: 'Our procedures aren't working. We need new procedures."'

"It's kind of a momentum thing," Sorensen said. "We knew from the beginning there would be time needed to educate the market. Because of the technology moving so quickly, it's really moving to the forefront."

Looking ahead

But Foster believes Caveon has a head-start on possible competitors because many test security companies rely on old models — people or perhaps cameras watching test-takers. "I don't think we'll see anything in the way of serious competition within five years," he said.