Having signed and sealed its $55 million acquisition of Dublin, Ireland and Boston, MA based e-commerce security firm, Baltimore, Zergo Holdings has decided to relinquish the company name which made it a key player in the security market. Until now, Zergo’s bread and butter business has been in putting together large- scale security projects for some 300 blue chip companies in the banking and defense sectors. The decision to forego Zergo Holdings and trade as Baltimore Technologies Plc is being viewed as a redoubling of efforts to build itself into a worldwide presence in the fast developing market for trusted encryption systems.
There are strong synergies between the companies, Paddy Holahan, VP marketing, told ComputerWire. Zergo had been strong in project-based services for the finance sector; Baltimore has always concentrated on product-based e-commerce developments. Zergo’s focus was on winning large contracts, almost exclusively in the UK and continental Europe (major customers include ABN Amro Bank, Swift and Geis). Baltimore’s deal sizes were more modest and spread farther afield in around 40 different countries. By integrating the companies, the aim is to combine the product strengths of Baltimore with the financial backbone and professional services capability of Zergo.
The only functional overlap is in the area of PKI, or Public Key Infrastructure: Zergo has a SecureKey product line and Baltimore has a well-regarded UniCert suite.
Going forward, Holahan says, the plan is to move to a point were these products will converge. They are very similar in architecture, adhere to industry standards and are each built around the use of a so far separate set of feature modules. In next generation products these modules could well be mixed and matched. The company has 20-30 developers setting about that very task, Holahan told us. New products are promised by the second quarter 1999, though at this stage there is an understandable reticence to reveal any more that that.
Whatever the final form or shape of Baltimore’s hybrid PKI Certificate Authority offering, the product to beat in this space is Entrust’s WebCA. Entrust, a Nortel spin-off, has two particular strengths: a capable product line that is comprehensive yet concentrated, and impressive technical credentials.
PKI products like UniCert provide a public key certification and registration capability ensuring that users’ identity can be trusted across widely distributed networks. Underpinning public- key cryptography is the confidence each party must have in the other not being impersonated. Certificates address this problem. A certificate is a digital document that guarantees the holder’s identity.
Ultimately, this guarantee rests on certificates being difficult to forge – to obtain a certificate requires that the applicant be carefully vetted by a trustworthy organization known as a Certification Authority or CA. Although some CAs issue certificates to the public, many users wish to avoid their charges while operating certificate-based PKIs themselves. Also, some organizations prefer to provide their own certification rather than trust a third-party CA’s security. Whatever the reason for choosing to act as an independent CA, software such as Entrust WebCA and Baltimore’s products can be used to automate the process.
In two years Baltimore has grown from having a staff of six in late 1996, to a post-merger organization with 350 staff working out of 11 international offices with a combined annualized revenue in excess of $30 million. According to latest market estimates the newly enlarged Baltimore is now on a par with Versign, another rival in the field of PKI, and only slightly behind Entrust which has revenues in the $40+ million range. Forecasts suggest the market for PKI is showing a compound annual growth rate of around 130% that will build during 1999 to touch may be $320 million worldwide.
While development of its PKI systems is a clear focus for Baltimore, the company’s combined product portfolio extends much further into the fields of e-commerce and enterprise security systems taking in:
Public Key Infrastructure (PKI) Systems Secure Email, Messaging and EDI Systems Secure Web Systems Virtual Private Network (VPN) Security Systems Enterprise security solutions Cryptographic Toolkits and Hardware
Looking at the growth of this broader market for data encryption and authentication systems, market researchers at Datamonitor put a value on the sector by 2001 of ten times that of PKI alone, at some $3.5 billion worldwide. To stake its claim to a larger share of this emerging market, Baltimore’s Halohan says a first objective is to ‘accelerate, expand and bolster the company’s market strategy’, starting with a ‘very significant increase in activity in the US.’
