Yoran says he knows directly from Microsoft that sometimes it will receive a legal subpoena to turn over data and Microsoft will do that without necessarily telling the customer. But with the cloud data encryption control in the hands of the enterprise, that couldn't be done without the enterprise knowing about it because Microsoft couldn't decrypt the data without the customer's cooperation.

Vaultive's approach encrypts the cloud-stored data, and allows only the authorized individuals to run an encrypted search query at the Exchange server hosted by Microsoft and "serves the encrypted results back," as the Vaultive proxy then decrypts it to be read in cleartext, says Yoran. Vaultive anticipates it will release other Microsoft-cloud-oriented products in the future as well as products designed to work with custom applications.

Vaultive, said to have about two dozen employees, was founded in 2009 by Ben Matzkel, chief strategy officer, and CTO Maayan Tal, who manages the engineering team and serves as general manager of Vaultive Israel. Both previously worked at McAfee.

This is the fourth security startup for Yoran, whose history includes executive positions at Sentrigo, MediaSentry, Riptech and Broadview International. Vaultive was started with a few million dollars in angel funding, and later obtained about $10 million in venture capital from 406 Ventures, New Science Ventures and Harmony Partners.

Ellen Messmer is senior editor at Network World, an IDG publication and website, where she covers news and technology trends related to information security.