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With Kasten Chase’s host-based encryption solution, companies in the financial services sector,
healthcare sector and the government are now able to protect and manage their valuable
data assets
Technology
Data Storage Security
(KCA-TSXV)
Kasten Chase
5100 Orbitor Drive
Mississauga, ON Canada L4W 4Z4
Phone: 905-238-6900
Michael Milligan
Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
June 2, 2005
BIO:
Michael J. Milligan
President and Chief Executive Officer
Michael Milligan is a leading advocate for the broad implementation of Secure Information
Management Best Practices and has spoken internationally on the benefits of a ’first
principles’ approach to privacy protection and information security. He is also a
regular commentator on the issue of regulatory compliance.
Mr. Milligan is a unique business leader, holding
degrees in both business and the law. He has spent much of his career working in the
context of innovative applications of technology for enhanced data protection. Currently,
as Chief Executive Officer of Kasten Chase, Mr. Milligan is leading a team focused on
developing better solutions for information security through enhanced data management.
Mr. Milligan is a member of the Law Society of Upper
Canada and the American Bar Association.
Company Profile:
Kasten Chase (TSX: KCA) delivers innovative data storage security solutions to mitigate
information security risks, meet compliance obligations and reduce the cost and complexity
of data storage operations. To complement its industry-leading storage security
solutions, the Company offers business services that assess and evaluate risk management,
compliance practices and storage resource management for enterprise storage systems.
BS 7799 and CISSP-qualified consultants utilize a comprehensive toolset to
prioritize and cost-justify information security investments that deliver business
improvements and a comprehensive foundation for compliance.
Kasten Chase established its IT security credentials
within government and military departments through its high-assurance, remote access
solutions. Certified by the U.S. National Security Agency and pre-approved by the Canadian
Communications Security Establishment, the company’s RASP Data Security™
portfolio protects some of the most sensitive information in the world.
Kasten Chase is headquartered in Mississauga, Ontario
with offices in Ottawa, Ontario and Sterling, Virginia. Kasten Chase is a certified ISO
9001:2000 company.
CEOCFOinterviews: Mr.
Milligan, will you tell us about your background with Kasten Chase?
Mr. Milligan: “I have been with Kasten Chase for ten
years now. I started as a director of the company when it was a private company and when
we became public I became CFO and general counsel of the company. At the beginning of last
year, I became the president and CEO. I have been with the company through a number of
stages of its development.”
CEOCFOinterviews: How
has the company changed since you have been CEO?
Mr. Milligan: “Over the years, we have been involved
with a number of different technologies; all mission-critical applications, and now we
focus on data storage security. We have developed a secure information management solution
that we think is well suited to address the emerging needs for information security.”
CEOCFOinterviews: What
are the emerging needs, what is changing and what is it that Kasten Chase knows that
others do not?
Mr. Milligan: “I think that many in the marketplace
recognize that data is a valuable corporate asset. We all know that organizations are
collecting more and more data, and we know given the compliance requirements, that not
only do they have to manage it well, but also they have to keep it for longer retention
periods. This is causing a new demand for storage resources – not just the volume of
storage, but also tools to ensure that the data is secure and managed over the long
retention period. The business opportunity that we see, is bringing security policies and
procedures and security expertise and experience to the storage industry.”
CEOCFOinterviews: Why is
security different over time than on a day-to-day basis?
Mr. Milligan: “In the context of the storage industry,
it is almost a paradigm shift. The storage industry thinks of data protection in the
context of disaster recovery and business continuity; that is, by making more copies of
the data available. If there is a disaster or disruption of business there are other
copies in other locations that can be used to continue operations. That is very different
from what we think of as true data protection, which is encryption of data to ensure that
inside or outside of the organization, there cannot be a breach of security such as what
we are reading about in the newspapers.”
CEOCFOinterviews: Are
most companies on-board with this concept, or do they need to be convinced that they need
something more than an antivirus program?
Mr. Milligan: “I think that companies are very quickly
becoming aware. I think that the incident involving the Bank of America has sharpened the
focus of CIOs, and now CIOs do not want to find themselves being the headline. I also
think with the kinds of legislation that we are seeing emerge, California senate Bill 1386
has set the trend, I think it will be a trend that will spread across the United States.
If there is a security breach where there is an opportunity for personally identifiable
information to be disclosed and where that data was not encrypted, there has to be not
only public disclosure but those organizations have to contact their customers and make
them aware that there has been a breach.”
CEOCFOinterviews: How do
you take advantage of this in reaching your potential customers and whom are you
targeting?
Mr. Milligan: “We are seeing three sectors of the market
as having an urgent need for true data security. That is the financial services sector,
the healthcare sector and government. We have developed a secure information management
solution that combines professional services and technologies to deliver a complete
solution. Our solution can be embedded within the storage infrastructure, without
impacting the storage resource management that other storage vendors provide, or other
data management tools. It is an integrated solution. We are seeing that organizations
really need to have compliance readiness, risk assessment, and ROI services to begin to
understand the processes to protect data. We have a product – SecureData, which can
be an infrastructure product that provides the platform to allow these organizations to
encrypt and protect data using very strong and fast encryption over a long retention
period.”
CEOCFOinterviews: Do you
sell directly to the customers?
Mr. Milligan: “We deal directly with end-users and we
sell with and through storage vendors.”
CEOCFOinterviews: Are
they licensing or purchasing?
Mr. Milligan: “It is a reseller arrangement. However,
there are some companies, which are showing some interest in a more utility model where
data-storage services are being outsourced and sold as a utility. The biggest interest in
the market is the conventional reseller or value-added reseller kind of arrangement. There
is a new trend emerging in the market, particularly with telcos, where there is an
interest in developing a storage-utility service. They are pricing it on the amount of
data stored or the amount of data encrypted.”
CEOCFOinterviews: When
it comes to reaching your potential customer how helpful in Kasten Chase’s military
background?
Mr. Milligan: “It is very helpful. When dealing with the
government, it requires some experience to be able to do it effectively. We have learned a
lot by working with the National Security Agency about what it takes to develop a secure
solution, not only in terms of technology development, but also in the security policies
and procedures that must back that implementation of technology.”
CEOCFOinterviews: Does
the heightened concern over identity theft provide an opportunity to present your products
and services to more willing listeners?
Mr. Milligan: “I think people are coming to realize its
importance. About a year ago, the range of legislation that they had to deal with
overwhelmed people. People have evolved their thinking to taking a standards approach,
where standards like ISO 17799, COBIT and SOGP are recognized as the information assurance
standards against which people ought to be measuring their operations. That is a huge step
forward. People do not want to find themselves dealing with compliance issues. The privacy
of employees and customers and patients and stakeholders, is paramount right now. The
legislation is driving that but so is good business practice.”
CEOCFOinterviews: Has
that resulted in more competition for Kasten Chase?
Mr. Milligan: “I think that there will be more
competition coming into this area. Bringing security into the storage space has not been a
very competitive landscape over the past couple of years. I think the focus on compliance
and privacy, as well as information security, will cause competitors to emerge over the
next few years.”
CEOCFOinterviews: Why is
Kasten Chase the right choice?
Mr. Milligan: “We are the right choice for two reasons, one is we have a services
program that supports the implementation of technology and that is essential. You need to
be able to have the tools that allow you to assess your current situation and to be able
to continue to monitor and improve it over time. We offer those services. Secondly, our
solution is a host-based solution, which means the data is encrypted from the time it is
created all the way to where it is stored, and it is encrypted during the entire retention
period. We think people are recognizing that their valuable data assets need to be
protected and managed in that way.”
CEOCFOinterviews: Will
you tell us about the financial picture of Kasten Chase today?
Mr. Milligan: “We are going through a transition where
we had a mature market with the National Security Agency, which comes to an end as a
result of the sunset date, which is December 31st of 2005. We have recognized
that that date would be coming and this market would be maturing. A couple of years ago,
we started to focus on storage security. The storage security market has not developed as
quickly as we would have hoped and would like to have seen, but it has developed. We are
seeing a lot of interest in the marketplace that has developed over the last couple of
months. We are optimistic about what we see in the future. We are exploring all of our
strategic alternatives. We have seen a lot of activity as this market crystallizes, and as
the industry consolidates a bit. We are very optimistic about our financial situation.”
CEOCFOinterviews: Do you
see acquisitions in your future?
Mr. Milligan: “I think the range of possibilities go
from conventional financing, through to strategic financing and strategic partnerships all
the way through to M&A.”
CEOCFOinterviews: Is
reaching investors a focus for you?
Mr. Milligan: “Absolutely! We have been a public company
since 1996. We have a large retail following of our company and we have many long and
loyal shareholders. It is important for us to be in-touch with them so that they can
understand not only what we are doing to address this market but how this market is
developing.”
CEOCFOinterviews: Why
should potential investors be interested and what should they know about Kasten Chase that
perhaps they do not realize when they first look at the company?
Mr. Milligan: “I think there are two things that are
important about Kasten Chase; the first one is that we have a long history of applying
technology to mission-critical applications, and storage security is one of those
mission-critical applications. We have a long track record in that area. The second thing
is that we have done a very good job of developing a secure information management
solution. It has been recognized in the industry as a leading solution because it combines
compliance readiness, risk assessment, and ROI services, with the implementation of a
host-based encryption solution.”
CEOCFOinterviews: In
closing, you are a finalist for Network Computing for 2005 Well-Connected Award; how
important is recognition in that arena for you?
Mr. Milligan: “I think it is a very important
recognition. There was a press release issued earlier today, which includes the companies
that were part of the assessment that was done by Network Computing. I think it is an
impressive list of companies. We are proud to be a finalist. I think it also shows the
strength of our solution. It shows how this area is becoming much more competitive. We are
doing well in an esteemed crowd.”
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