IT Voice) Vasco data security started its India operations in 2008, how has been the journey so far?
Mr. Valcke) VASCO’s business in India is going very well. So far, we’ve registered 21 customers in the banking and 51 in the non-banking sector, among which a lot of SMBs. These customers are situated in a lot of different verticals, such as IT, financial services, pharmaceutical and many more.
IT Voice) The market has been quite tough this year for everyone, how did this year pan out for you?
Mr. Valcke) We were happy to announce our 43rd consecutive positive quarter in October 2013. Our gross profit for the quarter was approximately 64% of the revenue. For the nine months ended September 30, 2013 compared to the same period in 2012, revenues from the banking market were essentially flat while revenues from the enterprise and application security market declined 14%. However, our plan is to reduce costs without jeopardizing the flexibility and the future growth potential of our company.
IT Voice) Talking about the India market what is your opinion on the security market here?
Mr. Valcke) The Indian market has some specifics that have to be kept in mind when doing business there. Not only the Indian customers’ well-known expertise of technology and the market’s price-sensitiveness are some characteristics, but also the country’s extensiveness and its huge number of various cultures and languages spoken are distinguishing. This has of course implications in terms of buying preferences. Customers prefer, for example, a non-hardware DIGIPASS, as the costs of distribution is usually very high, due to the wide geography.
IT Voice) What are the opportunities and challenges for you in this market?
Mr. Valcke) As stated previously, it is a challenge to persuade the price-sensitive Indian customer. Negotiating at daggers drawn is perfectly normal. Additionally, there is no vendor loyalty in India. This implies we have to scramble for every deal. And last but not least, India is a vast market that is not adequately covered, with little VASCO representation in the non-metro cities.
If we look at the market from a more global point of view, we see some other, more general challenges. More specific laws on privacy and e-identity come up, as well as stronger payments transaction rules which lead to new challenges. Moreover, the market evolution of the mobile apps in the tablet and smartphone world opens new business opportunities. However, the more apps, the more potential for fraud and the more specific regulations will be put in place.
IT Voice) What are the technology trends in this market? What are your predictions for the coming year in terms of technology trends?
Mr. Valcke) The security of online accounts will remain one of the major challenges for the Internet sector. With the ever continuing growth of the Internet as a sales channel (as well as the growth of online selling applications) and the explosion of social media as communication and business channels, the need for adequate online security has never been more prominent. Consumers and companies worldwide doubt the value of static passwords to secure their accounts. The recent hacking offensive has proven the validity of these concerns.
Also the so-called Internet of Things, the universe of objects that are connected to the Internet, calls for a secure way to control these objects. They should be secured to eliminate risks of these data being compromised.
IT Voice) Compared to your competitors what value additions do you provide to your channel partners?
Mr. Valcke) VASCO provides full pre- and post-sales support offered locally, including participation in proof-of-concepts for customers. Next to that, we have very attractive channel margins along with reseller salesman incentives. Moreover, VASCO can help set up local marketing campaigns in conjunction with the distributors. And last but not least, we have a comprehensive training package available, called SEAL, VASCO’s Security Experts Academy & e-Learning platform, which hosts a worldwide community of security professionals. Since VASCO is a security company, we consider it our duty to keep up with the current and emerging IT security trends and online attacks and spread this knowledge to our customers, partners and anybody who needs our advice, through classroom trainings, online and DVD-based modules and forums.
IT Voice) Lately SMEs have become the major target for attacks what is your opinion regarding their awareness when it comes to security?
Mr. Valcke) There was a time when mostly banks and large companies were targeted by cyber criminals. Yet, that time is definitely over. Fraudsters have shifted their field of activity towards the small and medium-sized business. An increasing number of SMEs have experienced losses and harm because of cybercrime. Nowadays, fraudsters consider SMEs as preferred objects, as they tend to be perceived to be less careful in their cyber defenses.
SMEs have more to offer than just banknotes. Hackers also obtain relief from customer information or intelligent property, or they may break into a smaller supplier’s database to use it as a steppingstone to reach a larger company’s information and data. The most destructive outcome though, is the reputation damage caused by a hack, a cost that cannot be quantified.
Unfortunately, implementing security is seen as buying insurance all too often: SMEs pay for it because it is cheaper than the possible disaster. Nevertheless, an SME ought to see these problems as a challenge to position security – and more in particular strong authentication – as a competitive advantage tool and business enabler.
IT Voice) How important are SMEs for you? What bulk of your business comes from them?
Mr. Valcke) VASCO believes two-factor authentication solutions can definitely contribute to boosting one’s business. Security, convenience and scalability are picked at random from the various possibilities. This contributes to a customer’s pleasant online experience, thus strengthening customer relationships. In short, strong authentication makes a company feel better safe than sorry: it prevents a damaged reputation and guarantees strong customer trust.
We have 2 traditional markets: banking and non-banking. A large part of this non-banking segment consists of SMEs of all kinds, in a lot of different verticals: IT, HR, food & beverages, to name only of few.
IT Voice) Any particular plans you have chalked out for them?
Mr. Valcke) We offer DIGIPASS pack for Remote Authentication, an out-of-the-box solution specifically designed for small and medium size businesses. The box contains all necessary hardware and software to provide a high level of security to organizations with limited resources and budgets. Based on proven one-time password technology, DIGIPASS ensures that only authorized users gain access to your corporate resources and applications. DIGIPASS Pack for Remote Authentication is available in packs for 5, 10, 25 or 50 users; allowing swift expansion when the need arises.
Secondly, we offer the DIGIPASS Appliance Pack. This solution is a convenient combination of the IDENTIKEY Appliance bundle with DIGIPASS Pack for Remote Authentication. This all-in-one solution offers a highly affordable strong user authentication server with client DIGIPASS authenticators that can be up and running in little time. It includes IDENTIKEY Authentication server licenses as well as corresponding DIGIPASS. The IDENTIKEY Appliance is available in 2 different hardware platforms with different storage and processing capabilities and the DIGIPASS Packs are available for a user range from 5 till 500.
IT Voice) What kind of services and products you plan to roll out in the future? Anything specific to SMEs?
Mr. Valcke) Another interesting product for SMEs – and more in particular to those having an online platform or online shop – is MYDIGIPASS.COM, our outsourced in-the-cloud offering. The solution offers a lot of advantages. First, this platform is protected with one-time password technology, offering more security and convenience. Secondly, the platform offers a single-sign on (SSO) possibility. Once a user has logged on, he can get securely access to the other applications on the platform. The annoying task of having to log on to various different applications is replaced by one single, secure logon process. A third advantage of the online authentication platform is its customizability. A company can use its own colors, logos and corporate identity, which generates user credibility and confirms the corporate brand. A fourth plus of an in-the-cloud solution is its scalability and increased flexibility. If the number of users increases, capacity can simply be added to meet increased demands; if the number of online users dwindles, capacity can easily be reduced without leaving an expensive in-house IT infrastructure unused.
IT Voice) How does your channel partners help spur growth for you?
Mr. Valcke) Our channel partners help us in reaching out to the market at large, and to get qualified opportunities for VASCO. They spread the VASCO word amongst their channel community and through word of mouth. They offer customers the most complete strong authentication solutions for their applications.
IT Voice) What kind of channel strategy do you follow? How many channel partners are there in India? Any plans to increase the numbers?
Mr. Valcke) We work with a limited number of channel partners across the country to avoid any channel conflict.We have about 20 active channel partners that are serviced via our distributors (Redington and Adweb Techno Trade).
IT Voice) Going forward what will be your GTM for the coming year?
VASCO’s unique business models are focused on the specific needs of the verticals, with a close eye on competitive evolutions and economic circumstances. The core focus is on creating awareness for and adoption of ourMYDIGIPASS.COM cloud-based strong authentication service. This is accomplished through a top-down and bottom-up approach. The top down approach refers to application recruitment, accomplished through lead generation andnurturing campaigns. The objective is to get the MYDIGIPASS.COM service implemented on as many web applications as possible.The bottom up approach, on the other hand, refers to application user activation, accomplished through dedicated user education and communication campaigns per application. The objective is to activate as many application users as possible on the MYDIGIPASS.COM platform.
IT Voice) What kind of revenue are you expecting this year?
We expect that our revenue from our traditional business, which excludes our new service product offerings, for full-year 2013 will be in a range of $150 million to $155 million.
