Security Systems, Inc. (ISS) (ISSX)
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Internet Security Systems intrusion
protection system RealSecure® goes beyond traditional antivirus
Bio of CEO,
Internet Security Systems' X-Force knowledge services organization is dedicated to proactive counter intelligence and public education against online threats. X-Force researches security issues, tracks the evolution of threats through ISS' Global Threat Operations Center, and brings new threat management solutions to market through managed security services, professional services consulting, X-Force Education Services, emergency response, X-Press Update product enhancements and comprehensive customer support. The company's services include managed intrusion protection service, managed firewall service, high-availability managed firewall service, client VPN service, managed site-to-site VPN service, managed anti-virus service, managed remote scanning, managed Web filtering and managed security services customer portal.
CEOCFOinterviews: Mr. Noonan, why was Internet Security Systems formed? What is your vision?
Mr. Noonan: Internet Security Systems was formed to effectively protect distributed systems and networks that were interconnected by a vast public network. At the time, the Internet was a technical concept, not necessarily the enabler that we know today. Our vision was to build a dynamic protection system that could detect threats of all kinds, which would compromise the integrity, security and availability of an Internet-worked system. That could be a desktop, a server, a network, etc. Our vision and our passion has been focused toward developing this core technology that would give businesses the ability to protect regardless of the threat on their systems or where they may be geographically.
CEOCFOinterviews: How are you doing that?
Noonan: We have a very innovative approach. The industry generally credits
ISS with the invention of two core technologies; one of them is intrusion detection (IDS) and the other is vulnerability assessment
(VA). These two technologies dynamically detect threats to distributed systems. Most of us
grew up with an anti-virus program and were protected when the only threat was a virus on
a distributed system. Today, there are threats of all kinds. You could look at our
technology as the next generation of firewall and anti-virus technology. However, they are
vastly different because of the dynamic nature of these systems. ISS products have the ability to detect, block and
prevent threats of all kinds, which is economically very exciting to businesses.
CEOCFOinterviews: Please tell us a little about how you provide this protection through your product offering.
Noonan: Three fundamental and unique assets here at ISS allow us to provide
this level of protection. The first is a group of researchers known in the industry as the
X-Force, who are fundamentally
researching threats and vulnerabilities on the Internet on a 24/7 basis. This is a very
advanced research group that is extremely sophisticated in their ability to understand,
track, monitor and define threats on the Internet and make sure that our systems, which we
call RealSecure®, is updated with the
latest capabilities to stop those threats.
CEOCFOinterviews: Do you license your software?
Mr. Noonan: Yes, we license the software to our customers. It physically resides on desktops, servers and network segments. That licensed software can be monitored and managed internally by the customer; a big enterprise might choose to set up their own security operation center within their company. On the other hand, there are thousands of companies that dont have security expertise and they cant afford to build a security operation center within their company. We provide that security monitoring for them on a 24/7 by 365 basis. The business model of this company is two foundational bricks - a protection system, which is the software-licensing model, and managed security services, which is the subscription annuity model.
CEOCFOinterviews: Are companies migrating more towards the managed solutions?
Mr. Noonan: It is the fastest growing part of our business today. We are adding literally thousands of customers a year. Many of our customers have said to us you are the security experts, you can do this cheaper and more effectively. Very few of our customers are in the security business; this allows us to leverage our unique expertise and solve the customers problem.
CEOCFOinterviews: Is your service guaranteed?
Mr. Noonan: One of the things about security, both in the physical world and in the network world, is that there is no silver bullet and there is no 100% solution to security. What you are trying to do is manage risk. We guarantee our service level agreements. A critical element of our customers business is to monitor and respond to threats, which is where they are focused.
CEOCFOinterviews: What do you think the market needs to understand as you look to increase your share?
Noonan: We have seen a lot of change as security has become more important to
businesses being confronted with security problems associated with Internet-connected
businesses. Typically, we will work with large- or medium-sized companies who deploy
RealSecure across the enterprise. Because the software agents touch every desktop and
every server, many of our customers are in implementation for anywhere from six months to
eighteen months, depending upon how large the project is. With smaller companies,
providing protection just in a simple gateway provides a great value.
CEOCFOinterviews: Is it more costly to implement your system?
Noonan: Absolutely not! It is less costly. One of the key drivers of the
adoption of the RealSecure® protection
technology has been the reduced total cost of ownership demonstrated everywhere it has
been implemented. There is less software to implement and manage, which reduces time and
complexity. With a common management console that literally sees every aspect of your
security geographically in the system and the world, requires less management tasks.
CEOCFOinterviews: How do you reach potential customers?
Noonan: Reaching potential customers is obviously one of the challenges for
every business. We have an unfair advantage in many ways in that our company has been
closely associated with the development of this pioneering technology. In fact, we are
considered the inventors of it. We have been able to leverage our reputation as a
competent, trusted security advisor in the large enterprises that we serve around the
world. Today, we serve somewhere in the neighborhood of twelve thousand, large and elite
enterprise companies, so the challenge has gone beyond that.
CEOCFOinterviews: So there is plenty of room for growth here?
Mr. Noonan: Absolutely! We are on the front-end of a very large horizontal market opportunity.
CEOCFOinterviews: Are acquisitions or joint ventures a part of your growth strategy?
Mr. Noonan: Acquisitions have always been within our strategic purview. In fact, since 1995, ISS has acquired very strategically to gain specific pieces of technology that we felt were core, enabling technologies that complement the base protection system that we have built . We havent typically gone out and acquired companies with revenue; we have typically acquired very interesting sophisticated technology. We have done five or six acquisitions and have integrated them effectively into the companys product line. Moving forward, we will continue to do so.
CEOCFOinterviews: Are governments, both U.S. and others major customers of yours?
Mr. Noonan: The U.S. Federal government is a very large customer for Internet Security Systems, both in the defense and civilian side of the business. That is not limited to just the U.S. government; we do a lot with state governments today for Homeland Security, forcing first responder requirements down to the state level. The state business is expanding very quickly. ISS is known the world over as a company that serves government interests. In fact, today we serve about thirty-seven of the worlds governments with our protection systems.
CEOCFOinterviews: Can you envision a time when insurance companies might require protection like yours or give reductions to their customers who have this protection?
Mr. Noonan: The insurance companies, who are entirely focused on risk-management profiles and business, are actually getting very active in this area. A good example is Tokio Marine and Fire Insurance CO., LTD, in Tokyo. They provide policies that are significantly reduced in terms of the over-all premiums if ISS is monitoring their networks and providing security. The same is true here in the U.S. with Marsh & McLennan Companies (NYSE: MMC), as well as AIG (American International Group, Inc. (NYSE: AIG), who are also providing deep discounts to their business risk insurance to companies that partner with ISS. In many cases, the reduction in premiums is significantly beyond the cost of the overall service for the year. There is almost an immediate ROI toward doing it, on top of having the benefit of enhanced security.
CEOCFOinterviews: Tell me about your core values, as featured on your website.
Noonan: The core values for the company were actually developed and put on a
piece of paper in1995, and they are something that is very important to me. Building this business has been much more than
building four walls; its been about bringing together visionary, passionate people
with a profit motive and a competitive desire to deliver something to the world that has
never been done before.
CEOCFOinterviews: In closing, what would you like to say to shareholders and future investors?Mr. Noonan: First of all, the opportunity for competent security companies is enormous. The world is not becoming any kinder or gentler - it is a perfectly horizontal market. Businesses are becoming more dependent on the use of computing systems; and critical infrastructure, meaning our banking, transportation, oil and gas distribution, and emergency services, are dependent upon a safe and uninterrupted Internet. Our goal is to stay agile and ahead of our competition while being a trusted partner to our customers. Potential is almost unlimited and we think we are well on our way.
We have been together as a team for nine years, we have demonstrated staying power, and we are profitable. Profit will remain a core driver of this company. We are innovative; we were just recently recognized by Gartner and IDC as the market leader four years in a row. We are committed; this is not a dot.com flash-in-the-pan. We are nine years focused on solving an enormous problem for our customers. I think if I had to leave our investors and shareholders with one thing, it would be for them to look at us and see that we are growing and have a tremendous opportunity. We are both competent and confident that we can seize that opportunity for our shareholders, our customers and employees.
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