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Technology Stocks : Entrust Technologies Inc (ENTU) -- Ignore unavailable to you. Want to Upgrade?

To: Louis XIX who wrote (192)	5/27/1999 9:30:00 AM
From: Dan Hamilton	Respond to of 1205

Entrust squares off against rival VeriSign Alex Anderson The Ottawa Citizen A dogfight is brewing in the burgeoning Internet security market. Entrust Technologies Inc.'s decision to create a new services unit dedicated to supporting Web-based e-commerce, puts it on a collision course with California-based VeriSign Inc. The new unit, Entrust.net, will begin by issuing digital "certificates" to Web servers -- essentially guaranteeing the security of servers and Web sites for online transactions -- and will then expand to include such things as insurance protection and e-mail support. This is Entrust's first foray into the digital security services niche, which is 70-per-cent owned by VeriSign. For its part, VeriSign wasted no time in defending itself and its turf. Yesterday, Richard Yanowitch, VeriSign's executive vice president for global marketing, said Entrust was "looking for a new business to get into" because its core software licensing business was going soft, and it was facing tough new competition from the likes of Microsoft. As for competing with VeriSign, "they have four years of catching up to do," Mr. Yanowitch said. To which Entrust spokeswoman Carrie Bendzsa replied: "That's typical of the kind of arrogance and misinformation you get out of VeriSign." Ms. Bendzsa admitted there is new competition entering the market in the form of Microsoft's Windows 2000 operating system, but she said Entrust's growth has been steady and strong. In the first quarter of fiscal 1999, Entrust reported 51-per-cent growth in its software licensing business, going to $11.6 million U.S. from $7.7 million in Q1/98. Bob Heard, Entrust's senior vice president of marketing and business development, said the real motivation for the formation of the new unit is to meet the demands of Entrust customers. "In the past year, the number of customers purchasing our software for Internet-based e-commerce transactions increased, and it became clear that businesses were accelerating their move to e-commerce." Entrust president and CEO John Ryan puts it more succinctly: "Our customers really want it, and it rounds out our portfolio nicely. "It has become clear to us that the market demand for services to enable secure Internet transactions and relationships is rapidly growing and, in the past few months, we have come to believe that this market opportunity is currently inadequately serviced." Entrust plans to differentiate itself from its competition in a number of ways. First it will offer both one and two-year certificates, thus cutting down of the required administration by customers. Second, Entrust.net will offer a life-cycle monitoring service that will notify customers when their certificates are about to expire and need renewal. According to Ted Julian, lead security analyst with Forrester Research, the move is one Entrust had to make. "They couldn't afford to leave this business on the table," he said. "The first way most companies use digital certificates is to secure their Web servers to do Web transactions and take credit card numbers on-line. Mr. Julian said the real opportunity comes later, when customers want higher levels of security through client certificates. It's these client certificates -- requiring mutual authentication for things such as stock transactions -- that are expected to see explosive growth in the future. It's hard to sell customers client certificates when they've already installed someone else's server certificates, said Mr. Julian. "That's where the money is in this business, and both Entrust and VeriSign are targeting it." It's a market in which the potential is clear. A report released last month by IDC said there are now five million Web sites, up from one million two years ago, while the Giga Information Group says there will be nearly 120 million Web servers in use by 2001, up from about 50 million in 1999. Finally, earlier this month Forrester Research predicted that online consumer transactions would grow 500 per cent to $108 billion annually by 2003. "I just see upside where they've added a new revenue stream and removed a barrier to growth in their core business," Mr. Julian said.