PKI Maker Turns to Services

Baltimore undergoes restructuring to focus on repeatable security solutions.

NEEDHAM, Mass.--In an attempt to resurrect itself after a disastrous 2001, security developer Baltimore Technologies plc. is orchestrating a massive reorganization.

At the heart of its reorganization is a shift of focus from PKI (public-key infrastructure) technology development to providing professional services and repeatable security solutions, according to Bijan Khezri, Baltimores new CEO, in an exclusive interview with eWEEK here last week.

The reason for the about-face has much to do with the inherent implementation obstacles surrounding PKI, Khezri said.

"What PKI is about is user registration and policies," said Khezri. "We have to overhaul our business because putting a PKI into place has caused tremendous problems for some customers."

As part of the companys restructuring, which began in earnest in August, Khezri has created a 10-member Solutions Group whose mission is to develop repeatable solutions around the companys products that Baltimores professional services force can then sell to other customers. The group is focusing its efforts on three main vertical markets: government and health care, financial service, and wireless and telecommunications.

Until now, Khezri said, the companys solutions efforts have been hampered by customers who wanted best-of-breed integrations as well as by Baltimores partnerships with dozens of companies whose technologies didnt always work well together. Baltimores key partners in the future will be companies with which Khezri sees a good technological or services-related fit, namely Oracle Corp., IBM and Microsoft Corp. on the technology side and Hewlett-Packard Co., Unisys Corp. and IBM for professional services.

"In reality, how many partners can you have?" Khezri said. "The time of best-of-breed is over. That was a sickness of the boom times. This company has never been successful at productizing our solutions because of many conflicts of interest [with partners]."

Khezri took over as CEO of Baltimore in October, succeeding Fran Rooney, who had resigned in July after several rounds of layoffs and massive financial losses. The company, which had been one of the largest players in the security market, had grown quickly through numerous acquisitions and also had acquired a mountain of debt.

The shift toward PKI solutions and services is a major one for Baltimore, which has traditionally relied on revenue from its UniCenter PKI and content security software to carry it. However, as digital certificates have become more common and are increasingly included with software such as Windows 2000, that revenue opportunity has shrunk considerably.

And, Baltimore, based in Dublin, last month sold its Content Technologies unit, giving it little room for error with this new strategy.

Baltimore customers say its the right move at the right time for the troubled company.

"Its a very reasonable move, what hes doing," said Radomir Zamurovic, chief technology officer at Ruesch International Inc., a Washington-based provider of B2B payment services and a user of UniCert. "Just like other technologies, [PKI] started off high and then it moved down market to the point where everyone offers it as part of their system, like Microsoft has done."

Khezri is also pushing for a big improvement in the companys gross margins, which currently sit at 50 percent. He wants to get that number up to 65 percent but knows it will be a tough fight, something he blames on Baltimores previous affinity for steep discounts.

"We havent been profitable because of too much discounting of our software and the pricing of our professional services," he said. "I asked some our professional services people at what point theyd walk away from a deal if it wasnt going to be profitable enough, and they said they wouldnt. We have lost money on some of our engagements."

Related stories:

  • Baltimore Sells Content Technologies Unit
  • Baltimores Woes Continue
  • Public-Key Security Takes Another Hit