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Route1’s MobiKEY
quickly and securely connects users to their desktop and network resources from any
Internet-enabled Windows-based PC
Technology
Secure Identity-Managed Computing Solutions
(ROI-TSXV)
Route1 Inc.
155 University Avenue, Suite 1920
Toronto, Ontario M5H 3B7 Canada
Phone: 416-848-8391
Andrew White
Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
September 14, 2006
BIO:
Andrew White
Chief Executive Officer
Andrew White brings 12 years entrepreneurial business experience in high technology,
specializing in product integration and design, and addressing business needs with
technology. Mr. White founded three businesses in wireless applications and networking
since 1995. Prior, he was the Manager of Information Systems at Delrina which was acquired
by Symantec. Mr. White also established a Software Testing Facility for a division of the
Ontario Research Foundation.
Company Profile:
Route1, a trusted provider of secure, identity-managed computing solutions, redefines the
way people work and access information. Using Route1's technology, organizations are
empowered to provide their workforce with seamless connectivity to computing resources
including data, applications and network assets, while leveraging existing policy, process
and infrastructure investments.
At the heart of Route1's offering is its flagship MobiNET product, a service delivery
platform for secure identity management. MobiNET manages a user's identity and the
services they are authorized to access by issuing RSA digital certificates to Route1
subscribers. It works in tandem with the MobiKEY, an ultra-portable computing device that
made its debut at the beginning of 2006 and is the culmination of Route1's extensive
research and development initiatives. The MobiKEY securely connects users to their desktop
and network resources from any Internet-enabled Windows-based PC. This comprehensive
solution replicates a user's desktop experience from any location, enabling organizations
to quickly adapt and respond to changing business needs.
Route1 is the technology provider of choice for a variety of international corporations
and public sector organizations in telecommunications, government, healthcare, financial
and commercial sectors. Route1 meets the needs of its customers by selling its solution
through an extensive network of highly specialized global channel partners.
Headquartered in Toronto, Route1 is listed on the TSX Venture Exchange (symbol: ROI) and
has offices in New York, California, and Florida.
CEOCFO: Could you tell me about your background with Route1?
Mr. White: “My background probably begins about twelve
years ago. My first job was with a small company here in the Toronto area, Manager of
Information Systems at Delrina, which went onto great acclaim as the makers of WinFax and
FormFlow, which is an electronic forms package. I think pretty much anybody you run into
has either used or heard of WinFax. Really, the first large breakout software company that
provided the ability to send and receive faxes directly from your computer, which changed
the way people were using their computers at that time. Therefore, that gave me a lot of
exposure into the industry as well as starting with a small company growing up to a large
successful company. When I finally left, there were about 720 employees, which was rather
rapid expansion for the company. From there, I started my own software development company
with a staff of about 5-8 people and we did contract development work for large companies.
We decided to start writing our own software and we wrote some specialized transaction
software for banks ATM machines. Unfortunately, it was a little ahead of its time and the
tech market crashed. Therefore, at that time I looked at the experiences I had and what
solutions that I developed that could fill a hole in the demands in the general community.
It took some time, but as opposed to coming up with a solution, I wanted to come up with a
platform in which I could run various types of solutions. The real work began on what we
now call MobiNET, which is our security platform that allows all the various transactions
that we run to operate in a highly secure environment and our first product is MobiKEY.
The foundation of the company and the architecture of what we sell is predicated on
security. How can we provide the highest level of security at a highly cost effective
manner? We also take into account some of the bugaboos that are out there with various
technologies today in terms of being able to traverse a firewalls, networks, and NATed
networks works that are becoming prevalent from home. We spent a lot of time architecting
what has become the MobiNET platform. At the same time as we were going through that
process, we decided to build a highly secure remote access solution that addressed all the
various issues of why VPN (Virtual Private Network) deployment was not more widely adapted
than it was at that time. Therefore, our first flagship product became MobiKEY.”
CEOCFO: Please tell me a
little more about the MobiKEY.
Mr. White: “The general premise of the MobiKEY is to
provide the user a real time experience of their existing desktop. With the MobiKEY, and
the various software components loaded up, it allows me to go to any Windows-based,
Internet connected computer anywhere on the planet and quickly plug in and have my desktop
presented to me on remote terminal. However, enabling the connection is not where we
stopped. Because of some of the security issues in terms of the keyboard loggers online
with remote computer, if there are viruses or Adware that I may be unaware of, it would
normally limit if not terminate any sort of use of that computer in the corporate world
because I just don’t know what is on it. Therefore, we developed a solution running
within MobiKEY that allows us to load our applications temporarily in memory and present
my desktop that I want to access in that environment without being compromised by any sort
of other applications that are running on the computer. In addition, not only is the
transmission of the data highly secure, but also the actual representation on the terminal
is also secure. Once I’m done, I just pull my key out and what I have just been doing
self-destructs and leaves no trace on the computer that I was doing the work on. I am not
leaving files behind or any indication of what I was doing or who I was. We enable
employees to connect and see their desktop computer in the same identical way they would
normally see it. This would be as if they were sitting in front of it, but do it in a
highly secure fashion without any sort of fear of transmission of mal-ware or keyboard
login security compromising program, the ability to compromise what I have just done.”
CEOCFO: What are the
advantages over connecting through a laptop?
Mr. White: “That is actually how it has been done for
the most part up until now. However, if you look at an enterprise, they are thinking,
‘now I have to buy laptops for my employees, not only that I have to double up all
the applications they are going to be using on the laptops, and then I have to go out
purchase a virtual private network’. On top of that adding additional security
components like an RSA Key fob, and even then, what I’m doing is pulling data from a
cooperate enterprise down onto these remote device. Everyday there is a story coming out
about someone’s laptop getting stolen; this is a good example where you have all
these laptops out in the field with data that typically isn’t secure. Therefore, now
you have your employees walking around with corporate information, not only for the
corporation but also for the customers that is potentially at risk. The VPN is only
securing the transmission during that time, what happens to the data when it comes down
onto the laptop, and of course, that with our solution the data network ever leaves. No
data is transmitted outside of the company. I’m assured that as a MobiKEY user, my
employees can carry on doing business from wherever they might be without ever
compromising any of the data or sensitive information that they might be using at that
time on a remote device.”
CEOCFO: Who is using
MobiKEY now?
Mr. White: “We have gone through a fairly broad cross
section of users ranging from small business people who are operating under several
different offices like consultants. Lawyers are using it so they can go home and spend
some quality time with the kids, put them to bed and then use the key to plug back into
their office computer and carry on with their computer at work but in the comfort of their
own home, to finish up some of their work. A case in point, my lawyer is always at the
office until ten o’ clock at night working, he could have been at home which
addresses a lifestyle shift. Moving into large enterprises where they want to be able to
stem the flow of the data everywhere problems that I alluded earlier to with laptops are
now in addition able to provide continuity, disaster recovery scenario and back-up plan
for the enterprise. What happens if the bird flu hits North American next season; nobody
will be prepared. Well, my business still needs to run and I can’t have my employees
all come to work and congregate in a common area, because people would be in isolation.
So, how do I quickly and cost effectively allow these people to keep working? We are
seeing that as a thrust well. In terms of the customer bases, it ranges from small to
businesses up to large multinational companies. Every user sees a different reason for
using our technology, but at the end of the day, it is the ability to be extremely
effective in terms of “I can always be connected wherever I am or get that email, or
work on that document.”
CEOCFO: Are there
ongoing charges or are they buying something outright; what is the revenue model?
Mr. White: “We actually have a fairly unique revenue
model. The one time upfront pricing for our products is $399.00 and what that provides the
purchaser is the KEY, which has a hardware component built in and the software-licensing
component. The majority of that is an ongoing service fee, so what we are really doing is
billing monthly, but getting paid in advance. Therefore, from our perspective, we are
getting all the money up front and then taking it out one twelfth at a time through the
duration of the contract. Obviously, there are very attractive volume breaks for larger
customers as the number of KEYs they are ordering brings that price down dramatically.”
CEOCFO: How do you reach
potential customers?
Mr. White: “We started off selling direct in order to
start seeding at the marketplace, but, the real strategy for us is to build the channels
and we are bringing on channel partners in a record pace and it is really leveraging their
relationships with customers that they established. This is a good way for the existing
VAR channels, with those relationships to go back to their customers and offer them a
truly unique, inexpensive product that can address several different business issues.”
CEOCFO: Where do you see
your business going in the future?
Mr. White: “I would say the vast majority of our future
is based on channel; any of the direct work that we are doing is really predicated on
larger customers contacting us directly. We will work with that customer and then
eventually bring in a channel and they will be ready to service those customers. Channel
sales is the lion share of our business with MobiKEY going forward.”
CEOCFO: What is the
financial picture like at Route1?
Mr. White: “We are still a fairly small, young company
here in the Toronto region. We are just starting to sell our MobiKEY solution and in fact
although we announced it in December of last year, we didn’t really start ramping up
sales until the end of the first quarter of this year. However, the sales have actually
been growing at a fairly significant clip and we can see the adoption rate continuing on
the path that we are able to maintain at this point. A few weeks ago, we announced that
our growth on the 2nd Quarter was 533% over the 1st Quarter.
Although, we are still talking relatively small numbers, if we can maintain a triple digit
growth pattern, you can see that the numbers will rapidly start to grow. We are expanding
internationally, through our resell VAR channels, and our growth is actually quite
sustainable.”
CEOCFO: Is international
sales a focus for you?
Mr. White: “When we first launched the product, we just
focused on the Toronto market, because it was in our own backyard and it was easy to
service based on that and the word getting out. In addition to that of course we were
participating in a few trade shows. We quickly gained the attention of other players on
global scene. Literally, overnight we expanded into Europe, with agents in Germany.
Recently we just announced expansion in the UK and the actual speed of which these markets
are adopting our technology have far exceeded our expectations. This is truly a global
product; it is just that we seem to have expanded internationally a lot sooner than we
thought we would.”
CEOCFO: Do you need to
gear up differently for that; are you ready for the growth?
Mr. White: “I think we are certainly ready for the
growth and there is still a lot for us to do. The way our MobiKEY works is through a
managed service which manages the security and authenticity of the users and the
computers, which they are connected to. That itself is the MobiNET platform that I spoke
about earlier, although it is based here in North America, we feel that we will soon start
building replications of the MobiNET environment in the regions that we are servicing in
Europe, and then linking them together. All that really does is really does is provide
greater redundancy to our network. The other thing we would have to do is localization of
our product into the various networks that we are servicing. At this point, certainly in
the European market that doesn’t seem to be much of an issue. I think a lot of
Europeans are quite comfortable at using the English language for Windows.”
CEOCFO: Is there much
competition from other companies and technologies that appear to do what MobiKEY can do?
Mr. White: “There is no direct competition and that has
actually been a plus and a minus for us, because we are really a category creator now.
Although it takes longer and a little harder to create a new category, it can be a lot
more financial rewarding in the long run. To say that what we are providing in terms of
remote connectivity is nothing new; being able to access a computer from another computer
has been around since the early days of mainframe. Of course we are also familiar with
products like GoToMyPC®. However, this is a lot more than just being able to serve up a
computer remotely by a screen refresh. It is all about the security model behind it and
how we are protecting not only the user from the information, but the corporate assets
when being connected to from the outside.”
CEOCFO: Address
potential investors, why should people be interested in now and what often gets missed
about Route1?
Mr. White: “I don’t think anything gets missed. I
think if investors stop and take a look at the company, they would quickly realize the
opportunity. It is interesting because we are relatively unknown on the global scene and
we trade on the Toronto Venture Exchange which is small relative to what people normally
look at in the Northern American investment world. We have a lot of shares in our company
outstanding and the general consensus of the vast majority of our shareholders is they are
buying and holding for the long term. This is a category creation based company, we are
forging a new category of secure, identity managed, remote computing. It takes time to
build up that critical mass, but certainly within the Canadian market, people have been
familiar with other like success stories such as RIM (Research In Motion Ltd. –
NASDAQ: RIMM), although they are a completely different product, people like to try and
compare us to their opportunity and growth. They have only about five million BlackBerry
devices and it took them many years to get to that point. The unfortunate side of that for
us is that we come out of the gates, and in a very short period of time, people expect to
see the same sort of growth and adoption of the MobiKEY as the Blackberry device, but in a
shorter time frame. There are pluses and minuses, but at the end of the day, when
investors do look at the company, they’ll recognize the long-term growth and
potential.”
CEOCFO: Do you have any
final thoughts for our readers?
Mr. White: “Because we are dealing with security, a lot
of people have come to us saying ‘who validated this security and how can you tell me
it’s secure, because I can’t necessarily validate it myself’. I have had
several large customers including a government require us to be vetted by third parties in
terms of the security model and Blackbox test our solution. We did announce ICSA Labs
approval, which satisfied a requirement put upon us by the Florida state government. We
are also in the final stages of another approval process that we are getting on behalf of
another government and we have actually sold to two other governments. From a security
model, we believe we have a very secure model in how we do what we do. It is different
than how most security and VPNs work. The opportunities of the various products that we
can layer on top of MobiNET will certainly propel us forward for many years to come.”
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