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October 18, 1998

GLOBALSIGN ANNOUNCES DEAL WITH UK CHAMBERS OF COMMERCE

By CBR Staff Writer

Belgian certification authority GlobalSign NV has unveiled a strategic alliance with the British Chambers of Commerce (BCC) enabling the latter’s network of approved chambers to act as registration authorities (RAs), issuing digital signatures for secure e-commerce. The alliance also represents GlobalSign’s first move toward integrating the UK into its international network, alongside Austria and Italy, where it already has full subsidiaries. The company itself was founded by the Belgian chambers of commerce and industry in 1996, starting out life as BelSign and changing to its current name in August of this year as part of its international expansion strategy. GlobalSign operates as the certification authority at the heart of the network, with the RAs acting as its distribution network. The company’s modus operandi, in expanding into another country, is to sign up a series of RAs who begin to issue its certificates, then transform one or a group of them into its local headquarters, responsible for taking care of the brand in that country. They adopt the GlobalSign name, giving them the appearance of a local subsidiary, even though the local partners may own most of the capital. GlobalSign’s director of international business development Henry Minassian said the company has yet to install such operations in two other major European markets, namely Germany and France, due to the regulatory framework in each country. In Germany’s case, the problem is the government’s decision, a few years ago, to create its own super-CA, from which all other companies looking to get into this business must receive authorization before commencing activities. There is already an active lobby working to do away with this structure via the EC, its argument being that the present situation infringes Union competition law. France, on the other hand, has no such body in certification, but its law placing strict limits on even relatively low levels of encryption is an obstacle to the development of the business, Minassian argued. Here again, the opponents of the current situation expect EU law to prevail over national legislation, forcing France into line with the rest of the Union. Minassian was skeptical with regard to most competitors in Europe. A lot of telcos have announced plans, but none are in the market with a complete service, he commented. The one major competitor he did acknowledge, of course, was VeriSign from the US. That said, he noted that their single-point approach, in which all certification can be carried out in Mountain View, California, was clearly not appropriate to the more complex political realities of the European Union. He envisions a time, as the e-commerce and certification market matures, in which two or three players will dominate it, as happens now in credit cards. In the case of certification, those names, Minassian reckons, will be VeriSign and GlobalSign. Before that, however, GlobalSign expects to undergo significant growth. Minassian pointed out that last month’s revenue of 8 million Belgian Francs ($238,000) was bigger than the company’s entire revenue for 1997. He said the company’s objective is to go public, probably in or around the year 2001.

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