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| Subject: Re: Smart Access Common ID Project DOD13 November 2002 | |
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Author: Ed MacBeth (ActivCard): "We are doing quite well" |
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Date Posted: Saturday, February 22, 03:23:51pm In reply to: Archive 8- 100711 History of Smart Cards 's message, "Smart Access Common ID Project DOD" on Friday, February 07, 08:38:05pm http://www.activcard.com/activ/services/library/E-smartransaction.pdf ------------------------------------------------------------ 13 November 2002 Ed MacBeth (ActivCard): "We are doing quite well" ------------------------------------------------------------ We met with Ed MacBeth, ActivCard Senior VP for Corporate Development and Marketing at the Cartes 2002 / IT Security show in Paris, on November 6th last. He shares with us his views on winning a SESAME award, ActivCard’s present and outlook. ------------------------------------------------------------ By Ivan Pandev ------------------------------------------------------------ First of all, how do you feel about winning the SESAME for Best IT Security Application with the ActivCard Gold 2.0? ------------------------------------------------------------ Ed MacBeth: I think the SESAME is particularly exciting to ActivCard for a number of reasons. ActivCard is a French company, which has been focused on IT security since the beginning. At the same time, the company has sort of ‘grown up’ surrounded by giants in the industry – Gemplus, Orga, Schlumberger, etc. – where the industry focus has primarily been on the big manufacturers and the applications which have been typically driving the industry – GSM and financial. ActivCard, since its beginning, has been really focused on developing and delivering really superb IT security solutions. So, for us, I think it’s really meaningful. It’s winning the award at home, it’s winning an award in a category where we have a lot of leadership and it’s winning for a product that I think is excellent. I think its results have demonstrated that. ------------------------------------------------------------ We have over one and a half million copies of ActivCard Gold deployed. ------------------------------------------------------------ The fact of the matter is that while there is a lot of would-be competition, both in enterprise and government, that would like to sell competitive client middleware, we continue to get the lion’s share of the business. So it’s really exciting, I think. For us it sort of identifies IT security and digital identity as a legitimate and meaningful segment of the smart card industry. ------------------------------------------------------------ One could say that ActivCard came into a market driven by SIM and banking cards, and pushed it in a completely different direction? ------------------------------------------------------------ E.M.: From a card manufacturer perspective, it’s one thing, because they’re looking at how to drive volume. Arguably, when you look at digital ID and IT security solutions, the percentage of the total value of any given solution is largely the software, and the services to deploy that software and the card is a key enabling technology, but IT security solutions don’t drive the same volume or value for the cards themselves. ------------------------------------------------------------ In our case, we’re delivering a lot of value. If you look at what we’re showcasing here at the show, the Corporate Access Card solution, which is the civilian equivalent of the Common Access Card project we did for the U.S. Department of Defense, we have a lot of components of that solution which make it work. We do the security and the digital identity applets on the card itself, for which we worked with the DoD and the GSA (General Services Administration) to establish the standards. We do the client software with ActivCard Gold – our award winner – at the client level, and that’s used by the Army, Air Force, Navy, Marines and other defence agencies. And we also do the back-end system for secure issuance of the cards, which is hosted at the DMDC (Defense Manpower Data Center) back-end data centre. ------------------------------------------------------------ They have deployed 1.3 million cards and they’re deploying at a rate of about 8,000 a day, with a potential rollout of 4.3 million, being the first audience they’re going after. But this only includes the DoD and not the non-defence agencies, and currently, based on this technology which we deployed, we’re now taking that out and offering it to the other government agencies. ------------------------------------------------------------ To get back to your original question: the value is in the solution. I think we’re just very honoured to be recognised as a leader and as someone who’s helping to ‘pave the road’. ------------------------------------------------------------ A contract with the DoD can’t hurt business. ------------------------------------------------------------ E.M.: We have tremendous credibility, and it’s based on the fact that, certainly, being one of the key enablers of the largest smart card deployment in North America doesn’t hurt, but it’s also based on the fact that Sun’s corporate ID badge is based on the same technology. We’ve announced having put together the system for Microsoft, and they’ve deployed about 27,000 of their cards. So I guess that, if you’ve got to pick through reference accounts, the DoD, Microsoft… We feel fortunate. ------------------------------------------------------------ One question comes to mind when reading your release on the Corporate Access Card solution is: Why give it the same initials – CAC – as the DoD’s Common Access Card? ------------------------------------------------------------ E.M.: That’s a good question and it was an interesting debate. What we’ve seen is that the architecture of the Common Access Card is extremely flexible. They can be used for storing information about an individual, for storing keys, for storing a number of different applications securely… And what we found is that the success of the Common Access Card has gained such visibility within corporate enterprise that a lot of them have been saying that they want a "corporate Common Access Card" to take advantage of that same architecture, with other applications put on the card. But, the system has been proven to be deployable, manageable, robust and very flexible, so, with so many people asking us for a corporate version of the Common Access Card, we just decided to call it the Corporate Access Card. ------------------------------------------------------------ What about the market itself. Since 9/11, we’ve all had the impression that, from an IT security and digital ID perspective, with the Common Access Card for example, it’s taken off. Is that true? In other words, how would you describe the market at present? ------------------------------------------------------------ E.M.: I think that September 11 raised awareness tremendously, but whether or not it was a business driver, is debatable. Given the state of the economy, our customers, who are nicely distributed among government, enterprise and financial sectors, are deciding based on whether the investment is justifiable. So, awareness is probably higher than ever, and I think that right after September 11 you could see a lot of ‘spikes’ in various companies’ evaluations, but it was short-lived. ------------------------------------------------------------ So, there’s a difference between the ‘awareness’ and its translation into actual business? ------------------------------------------------------------ E.M.: Yes, absolutely. There are some things that we’re trying to do to speed the rate of adoption. A lot of what we’ve tried to do with the introduction of the Corporate Access Card is to start to sell a solution. That way we don’t have to go to a customer and have to talk about applets and middleware, issuance and management, PKI and all those kinds of things. We’re trying to package these kinds of solutions in a way that is easy to experience. So, if a company wants to deploy a 100-user pilot, and understand what it’s like to manage digital identities and certificates, they can do it and they can do it relatively easily. ------------------------------------------------------------ Getting the system up and running is now a matter of days to a week, which is certainly a lot more advanced than the time when – a few years ago – every one of these projects required a tremendous amount of professional services. So, what we’re doing is to make it so that companies can experience it painlessly for a relatively affordable initial investment and then, from that point, it’s a matter of scaling what they’ve installed. ------------------------------------------------------------ We think, based on the early indicators from the announcements with Sun and the announcements with Microsoft, that the demand is high and that we’ll see quite a bit of adoption. ------------------------------------------------------------ In the current state of the market, a lot of firms are going trough hard times. Is ActivCard ‘in the dumps’ or – in comparison – not doing that bad… or even, doing well? ------------------------------------------------------------ E.M.: We are doing quite well. The board brought in a new management team at the end of last year. Steve Humphreys is our CEO. I joined shortly thereafter… We have now in place a very professional management team which has done this kind of work at a variety of different places beforehand. ------------------------------------------------------------ I think that what we are now able to do is to take a company which has a tremendous amount of expertise, great technology, products, and now, solutions, and really manage it for success. ------------------------------------------------------------ We came in and put together what we thought were achievable but significant revenue objectives in a year where the economy is arguably not that strong. We said we’d shoot for 30% to 35% top line growth for 2001; we also implemented cost-control measures to bring head count in line with what it should be for a company our size and a 15% decrease in expenses overall, which got us to cash flow break-even by Q4 and EBITDA break-even in Q1 of next year, and going positive from there. The good news is that we have met or exceeded our objectives, every single quarter. It certainly was a lot of work, but we met and exceeded those objectives and we manage that way. We focused heavily on making our customers satisfied and delivering on our promises. ------------------------------------------------------------ Less than a year into working with ActivCard, we feel like we’re in a good position. ------------------------------------------------------------ Where do you see your market going from here? ------------------------------------------------------------ E.M.: There’s going to be a lot more adoption in government and there seems to be an interest across agencies and internationally. The other two markets: first is the enterprise sector. What’s driving that is that strong authentication is a pretty well known application. What we’re seeing now is that for what a lot of companies have been spending on strong authentication and remote access solutions from a variety of our competitors, we can now offer the choice of moving to smart card technology, be it a USB key or full multi-application CAC card-like solution for about the same as what they are currently paying to support their strong authentication infrastructure. ------------------------------------------------------------ Financial: there are a lot of promising initiatives underway with EMV. We will certainly be ready when the banks are, because, with this same CAC infrastructure that we’ve developed, we can put EMV on that same card. We hope to see some convergence there. ------------------------------------------------------------ [ Next Thread | Previous Thread | Next Message | Previous Message ] |