Few themes in business news have more consistently made high profile headlines over the past few years than breaches of network security at large organizations.
Target, eBay, and even such technology leaders as Sony, are among numerous well-known entities to have suffered at the hands of individuals or teams bent on infiltrating their computer networks and making off with sensitive data.
Perhaps the most concerning thing is that we never hear about the vast majority of intrusions, either because the victims do not make them public, or because they are unaware that anything is even taking place.
The one thing we can be sure of is that the world of network security is changing at an ever-accelerating pace, with the result being that many organizations don’t even know what they don’t know. If ever there was a situation necessitating expert, third-party support, this is it.
That being the case, it is hardly surprising that Colorado-based VirtualArmor International Inc. (CSE:VAI), which made its debut on the Canadian Securities Exchange on November 24, is seeing demand for its skill set rise at a furious pace.
Established in 2001, VirtualArmor started out by helping clients manage networks that were already in use but needed changes to enhance security.
“What we began to realize is that customers were getting the products they purchased up and running, but they really didn’t have clear insight into what that network of technology was doing and how to manage that network of technology to make it the best solution it could be,” explains Chris Blisard, VirtualArmor’s founder and chairman.
It didn’t take long for the company to conclude that the best way to help clients was to be involved right from the start so it could head off problems before they got the chance to take root.
VirtualArmor will still help new clients with existing systems if that is the support they need. But what it would rather do is help a client design a system, sell them the hardware, set it up for them and then oversee operation of the system so that it not only serves core business needs, but does so in an environment of absolute security from day one.
“There is a whole portfolio of technologies out there that when used in concert create this beautiful architecture that really becomes the guardian of your network, and that is how we define what we do – we become the guardian of your network,” says Blisard.
Being in the security business, Blisard is discreet when discussing the specifics of work VirtualArmor conducts on behalf of clients. He offers the example of a multinational company, which goes unnamed, that has been a customer for over 10 years to illustrate the depth of his team’s involvement.
“We became part of the client’s internal organization,” says Blisard. “We attend their weeklymeetings to discuss challenges and changes in network protocols, we deploy and maintain all of their perimeter security, we report 24/7/365 on any anomalies, and we help them to find and design the security protocol for their network.
“For a company like that, which is managing a tremendous number of environments that are global and that are attack points for someone who might want to get information, we become the guardian for them and become an integral part of their organization and are outsourced as part of that team.”
Being “on” all the time is easier when you have personnel in more than one time zone. VirtualArmor relies on its long-established office just outside of London to be there for clients when the team in the US is enjoying some well-earned rest.
Blisard explains that far from burdening VirtualArmor with extra expense, the UK office actually increases the company’s profit margin, so complementary is it to the team in the US both in terms of technical capability and cost-efficiency.
“The talent we have working for us in the UK is top-tier,” says Blisard. “The gentleman who runs the office, Andrew Douthwaite, has been with us for over eight years and is an important member of our senior management team.”
On the topic of margins, VirtualArmor is generating cash flow from operations, before changes in operating assets and liabilities, and has maintained the prudence to grow only so fast as internally generated cash could support. Sales for the nine months ended September 30, 2015 were US$4.9 million, with operating cash flow, before changes in operating assets and liabilities, of 8% of revenues. The comparative period revenues were US$3.6 million.
However, with opportunities for new business looking so plentiful that Blisard refers to them as “never-ending,” management concluded that now was the right time to seek capital externally, as doing so would enable faster growth without unduly pressuring the existing business to support it.
After many a long discussion as to which path was best, the decision was made to list the company on a stock exchange.
“We decided that if we could find the right venue to take the company public, that is the choice we would make,” says Blisard. “Our team feels that security is something that everyone is concerned about today and is going to be concerned about forever. We felt that by going public, because of the importance of what we were doing, and the types of investors out there today who understand technology, we were going to be a really wonderful fit.”
It is often a good time for a successful business to turn to the public markets just as it’s expecting significant growth that can drive strong returns. Investors should be happy to know that while putting every bit as much effort into traditional services as it always has, the company recently launched a new service to take advantage of the explosive growth in demand for centralized data storage and management, or what more commonly is referred to these days as the cloud.
The name of the service is CloudCastr and it delivers to organizations a custom-built cloud featuring best-in-class security and network management from its first day of operation.
“CloudCastr was born out of multiple discussions with customers about how best they could move to the cloud,” says Blisard. “There are many large cloud providers out there that you can load your files onto but a lot of organizations are trying to understand what it actually means when they do that, and what degree of exposure they have.”
“CloudCastr allows us to understand what the customer’s requirement is, how much of their infrastructure they are trying to move onto the cloud, and what their expectation is of what it is going to give them. We work together to determine what their security requirements are and then we build them a customized cloud environment.”
VirtualArmor integrates its security and managed services platform with the new cloud so that the client has a full solution – from concept all the way through to maintenance once the cloud is in use.
“Today, our managed service business is growing rapidly and that’s because you are seeing this massive movement toward outsourcing cyber security,” says Blisard in discussing the various segments that make up total sales. “Our cloud service will become another revenue stream that we are not seeing now, but that we feel will grow dramatically in the upcoming calendar year. And then our hardware sales and professional services are more or less equal contributors.”
Also shaping the organization going forward will be new offices. There is expected to be at least one established in Europe, largely to grow sales, but perhaps first one in Canada, with both Vancouver and Toronto in the running owing to their ability to serve as regional hubs.
Growth through acquisition is also on the table. “We will look at acquisitions of companies we believe will get us to a place faster than we can organically, whether it is because of their intellectual property, their products, or their revenue,” says Blisard. “We don’t want to define and build a discipline if we believe that in the long run it would be less expensive and we would get there more quickly if we could make an acquisition.”
When asked what sets VirtualArmor apart from the competition, Blisard is clear and concise in his answer. “With every solution we have, we are extremely in depth and believe we are considered subject-matter experts in that solution.
We have a great track record supporting, managing and maintaining for our customers,some of whom have been with us for over 10 years. We look at giving our customer the ability to see what’s going on in their network and to respond to an attack before it happens. That is what Chief Information Officers are looking for today. They’re looking for companies that are not only responding, but actually pursuing. And that is what we do.”