In The Boardroom With...

Mr. Denis Hébert
President and CEO, HID Global
Executive Vice President, ASSA ABLOY

SecurityStockWatch.com: Thank you for joining us today, Denis. In addition to your responsibilities as President and CEO of HID Global, congratulations on your appointment as executive vice president of your parent company ASSA ABLOY AB in September 2007. Please give us an overview of your background.

Denis Hébert: I’ve been with HID since 2002. Prior to that, I worked for Honeywell International for 17 years in a number of different roles, including managing functional areas like marketing, engineering and manufacturing operations, in addition to field operations. I began my career in Canada, then worked in Europe for five years, and finally returned to North America when Honeywell acquired Westinghouse Security Electronics. At that point, I became president of NexWatch, a Honeywell company focused on Enterprise access control systems.  I’ve been in the security domain for close to 25 years now.

SecurityStockWatch.com: In reading your website (www.HIDGLOBAL.com), I read that "Millions of people around the world use HID Global secure credentials in their everyday lives — and probably never think twice about it.” It’s clear your organization is focused on solutions for the delivery of secure identity, but can you give us an overview of your product line?

Denis Hébert: We are the trusted leader in providing solutions for the delivery of secure identity. Our focus is on creating customer value through identity-based solutions that apply to either physical or logical access, card issuance, asset and animal identification, as well as embedded technology solutions that are used by a worldwide network of development and integration partners for a broad variety of applications. People never think twice about using many of our products, as they have now become familiar with contactless identification technology. However, our technology offerings go beyond the typical use of credentials as we know it.

Our business is divided into strategic business units. The first is our Identity and Access Management (IAM) business, which creates a framework for managing and provisioning identities which can be recognized and authenticated across multiple locations within an organization. Many of our solutions are designed to address the balance between security and convenience in providing a more secure and efficient workplace.

For solutions designed and built around the physical access control domain, we have brands such as iCLASS®, Edge® and HID Prox. These products are sold into the integrator and distribution channels, as well as through OEMs that provide complete access control systems.  Our HID Connect program further enhances the value proposition by enabling complementary partner products to use Genuine HID™ Prox or iCLASS® by selling or licensing embedded technology solutions.

IAM also includes logical access--using a common physical access credential for logon to computers (authenticating to either the Windows® operating system pre-boot or network levels) with recognized brands such as OMNIKEY® readers, Crescendo® credentials, naviGO™ software and HID on the Desktop™ .  Also, credentials can equally be used for authentication to applications such as full disk encryption.

The third segment of IAM is our secure card issuance business. Basically, this is the ability to securely print graphics, images and text on a card, in addition to encoding the card during the printing process on our various Fargo® printer products. Also, our AsureID® software package provides the ability to create and produce photo ID badges, as well as enabling basic credential management. This business provides a mixture of printers, encoders, secure materials and software solutions that enable secure issuance of identity credentials.

A new offering that takes advantage of our Identity and Access Management infrastructure from a service perspective is called Identity on Demand™. This service provides encoding and printing base elements on a badge, with either central or local points of personalization, using Fargo printers and a mixture of service capabilities that customers can choose from.

Our second strategic business unit is the Identification Solutions business (IDS), which is really a technology enabler. The IDS business uses contactless technology to enable specific use applications within three segments which include cashless payment (the use of RFID in a transaction environment such as transit or credit/debit), eGovernment (the use of contactless technology in electronic identification documents such as passports or national ID’s), as well as Industry & Logistics (the use of contactless technology in the identification of animals, pets or assets)

In our Contactless Payment segment, we supply contactless inlays for transaction cards (such as transit fare, credit, debit or campus), as well as the contactless readers (either as embeddable modules or finished readers) for use in point-of-sales terminals or transit capture.

eGovernment represents our second segment, where we provide contactless inlays used within e-documents or electronic identifying documents; such as passports, national IDs or driver’s licenses. Our eGovernment solutions also include e-Health applications that some countries are implementing, where people use a card to authenticate their identity to doctors or hospitals. The terminal that reads these cards is also produced by HID Global, creating a secure environment for identity and patient records management.

In the industry and logistics segment, we are involved in different use applications, such as waste management (where waste bins are tagged and monitored for use and billing), medical device calibration (for example dialysis machines that auto-calibrate themselves based on patient’s requirements transmitted from a contactless tag), or the identification of livestock and pets (used to monitor the food chain or simply identify a lost pet).

SecurityStockWatch.com:We understand that you have recently introduced several new products and services into the marketplace under the umbrella of Genuine HID™. Please elaborate for us regarding the value that these initiatives will deliver to the marketplace.

Denis Hébert: The initiative surrounding Genuine HID extends and enhances the customer experience relative to product quality, delivery and service, reinforcing a key element in our business: “trust”. Genuine HID is a core value built upon the trust that we have with our customers; allowing them to invest with confidence.

Our customers are critical stakeholders in all that we do – so we provide the Genuine HID™ value proposition as a natural extension of our mission. We are committed to providing them with the most trusted and advanced security solutions that they can obtain.

The Genuine HID ecosystem is built around three components. “Genuine HID™ Products” ensuring the guaranteed value of our products (interoperability of components, lifetime warranty, global certifications and seamless migration solutions), the “Advantage HID Channel Partner™” program (promoting Genuine HID™ through a select group of experienced HID Global OEM, distributor and integrator channel partners, dedicated to delivering the benefits of Genuine HID™ to their customers), and the “Genuine HID™ Technology” trademark, so development partners’ customers can identify products featuring HID technology.

Our customers can invest with confidence in a set of values that will enable us to manage the full lifecycle of their product needs, representing key advantages that we provide to our customers through Genuine HID™.

SecurityStockWatch.com: What are your key target markets and what is your perspective on the market drivers for HID solutions at this challenging economic time?

Denis Hébert: We are not immune to the economic situation, but we have clearly tried to focus on those verticals that we believe can provide growth, such as enterprise, higher education, health care, finance and government. Our strategy of providing solutions for the delivery of secure identity can only be fulfilled by creating relevant solutions that can satisfy the requirements of the end users in select verticals. This will provide our channel partners with relevant offerings.

If you look at health care, for example, our ability to provide solutions that allow health care providers to address HIPAA regulations is an advantage. They may already be using our credentials for physical access control, but they can also use them as authentication devices to access digital patient records. This helps solve the authentication problem in a cost-effective manner using a single credential for both physical and logical access, while providing a more risk-appropriate solution to ensuring patient data privacy. This is one area where we can extend the value of what they already have and provide a solution to a problem they are struggling with today. It’s the perfect kind of approach to the current economic environment.

There have been a number of virtual products that have been successful for us, as we have introduced Genuine HID™ technology into Dell® E-Family Laptops. Our HID on the Desktop™ products have extended the value of an existing credential or card a customer is presently using to access doors, by also utilizing the same credential to access Windows®.

In addressing the economic environment, market conditions are impacting our customers worldwide. There are some bright spots this year, such as our secure issuance business where our Fargo® brand has grown counter to prevailing trends. An example of relevance was how we addressed challenges the banking industry has in providing credit and debit facilities to customers in how quickly they can get a card to a customer after the application has been made. In the last year, we have partnered to make a key development in the ability for our Fargo® printers to be used for instant issuance of credit or debit cards in bank branches, by printing and encoding cards on-site. Using instant issuance, I apply for a credit card today, and instead of waiting two weeks for it to arrive in the mail, I get it instantly so I can use it immediately as I leave the branch.

Geographically, we have grown in India and China this year as their economic environments have come back faster than most countries.

SecurityStockWatch.com: Can you talk about some success stories in some of your key vertical markets?

Denis Hébert:In the government markets, we are providing contactless technology that is incorporated into passports in a number of different countries worldwide. We’ve seen our number of reference countries for our e-passport segment grow to over twenty four countries worldwide. Also, we provided a substantial number of our reverse image transfer HDP5000 printers to the U.S. Department of Defense’s Defense Manpower Data Center (DMDC). These were used to print and encode cards to support their Identity Protection and Management projects on a worldwide basis at over 1,600 sites producing somewhere in the vicinity of 3 million cards a year.

In the financial vertical, over 600 bank branches are using instant issuance solutions enabled by Genuine HID™ technology, as described earlier. So, this has been a very successful new application for us. On the contactless payment side, U.S. Bank has piloted a card solution that incorporates identity and access control with payment, providing users with a single card that allows access to secure buildings and facilities, while also allowing the holder to make purchases. The converged card offers a unique value to campus and enterprise environments by enabling them to do more with a single card solution. System managers benefit from the greater utilization, while users can appreciate the convenience of carrying a single card.

We’ve had some exciting developments in the supply of hermetically sealed readers that are used for logical access in health care environments. Users present contactless credentials to the reader for access to networks or PCs. The readers can be easily cleansed and disinfected because they are completely sealed, as well as being IP67-certified for use in hygienic environments.

Over the year, we have seen HID on the Desktop™ now being used by a number of different customers worldwide in the financial sector, communities and hospitals. The solution extends the use of existing physical access control cards as authentication devices to the logical world. Other exciting developments for us in 2009 include the tremendous partnership that we’ve developed with Dell in incorporating our iCLASS® technology into all E-Family Laptop computers delivered this year. So it’s been a logical solution for customers that are already using iCLASS® technology at their sites and can therefore use the same credentials to logon to a system without needing an external reader since the reader is designed into the laptop.

SecurityStockWatch.com: HID Global obviously focuses on its global footprint, ensuring global certifications and maintaining local support. Care to comment about market penetration for HID solutions in China, India and other international markets?

Denis Hébert:Well, many of the international markets are developing ones. There has been a lot of infrastructure investment taking place in China and we’ve been very fortunate to be part of that, supplying airport security for example. We’ve also been successful in providing some animal ID solutions to the China market. In India, we’ve been focusing more on providing logical access solutions, while actively pursuing opportunities for eGovernment applications as well. A number of different areas of our business have been very successful in Asia Pacific, so clearly there are great opportunities.

Part of the challenge in these countries is twofold: one is evangelizing and really promoting technology solutions in a nascent market place with channels which aren’t very well-developed, but certainly desire to move forward quickly. Yet there are intellectual property challenges in some countries we have to deal with. Both China and India represent tremendous growth opportunities, which we have fortunate enough to experience over the last few years.

SecurityStockWatch.com: HID Global recently announced its collaboration with Dell™ on Latitude™ E-Family laptops with embedded contactless smart card readers. This is a very impressive strategic relationship. Please tell us more. Any other particular strategic relationships you care to mention?

Denis Hébert: As I mentioned earlier, it’s a key relationship for us because it really provides a value proposition to end-users, by extending the value of our credentials, as well as providing a more risk-appropriate authentication solution via Dell® laptops. It’s been an exciting adventure for both of us. They’ve decided to be on the forefront of how credentials can be used as authentication devices to their laptops.

Clearly from a strategic relationship standpoint, it doesn’t end there. We have focused ourselves developing key strategic alliances, working with major players across industries to leverage off each other in either jointly developing or supplying technology, to further extend our mutual value in the marketplace.

SecurityStockWatch.com: What does the future hold for HID? What benefits can end-users expect from future developments from HID Global?

Denis Hébert: In terms of future market drivers, we see a few key areas. These include providing interoperability for converged applications, enabling virtualization, key management and delivery services. HID Global’s future direction is being shaped by work we are doing today in these domains in anticipation of future market needs.

Interoperability for converged applications can be demonstrated by crossing the boundary between closed systems and open systems. As an example, take a campus environment. A student ID can be used within the closed university system to check out a library book, enroll in classes, access the IT network and buy lunch in the cafeteria. But it also has a secondary application that permits its use with the local transit authority. So it’s an open system in the sense that it could be payment-based, with converged applications on the same card.

Converged applications don’t necessarily have to use a card. In the mobile device world of tomorrow, you can have virtual closed or open applications residing on your phone. It could be an app on your iPhone, where you’re now doing transactions with a credit card application residing on your phone, or even using the same phone to identify yourself to a closed system municipal library.

With virtualization, we are talking about a virtual way of looking at the reader and credential worlds. We’re taking the identity that is normally stored on a fixed credential and sending it over the air to a mobile device. In a residential situation, for example, it could be opening the lock on the front door of your home with an NFC-enabled phone.

Key management represents how we manage the secure encryption keys either for, or on behalf of a customer. A customer may want to create their own keys and have us manage them on their behalf, or have HID Global generate a unique key for them to be used in specific applications.

Delivery services provide the delivery of identities in a virtual world so we can provide identities either to a card on one of our programmers, or to a Fargo® printer which then encodes the card on the customer’s premises. We can provide the keys to an Edge reader through our Trusted Identity Platform™ (TIP). Today, delivery services mean: ”I put this in a box and I ship it to you“, on time, every time. Tomorrow, we will send things through a secure delivery infrastructure. That future premise of delivery services represents how one would deliver either identities, applications, updates or keys in a different way than how we’ve done it in the past.