There's no question that Irish security software company Baltimore Technologies has style - it proved that during its well-run inaugural conference, attended by nearly 700 delegates in Dublin this month. Whether Baltimore can become a leading global company, rather than just a strong European-market player, is the challenge the company now faces.
hey're very strong in Europe - their relationships with financial institutions, in particular, are second to none," says industry analyst Mr Charles Rutstein of Forrester Research in Massachusetts. "That said, Europe is not the centre of e-commerce today, it's the US." And e-commerce is the driving force behind the security technologies Baltimore specialises in, he says.
That means Baltimore needs to make a serious impression in America, fast, and Baltimore chief executive Mr Fran Rooney knows it. "Obviously, the US is the key market," he says. "Attacking the US market is very important." But at the start of this year Baltimore had virtually no presence in the US, a fact readily admitted to by Mr Rooney.
However, the company, a model of successful self-promotion, has worked hard to begin to create a US name identity. In 1997, when the company was little more than an unknown blip in the security technologies world, Baltimore swaggered into the leading annual industry event, the RSA Data Security Conference in San Francisco, and handed out Baltimore-logo'd cigars.
The next year they were back, throwing a memorable party; still trying to look bigger than they were; still one of dozens of barely-known companies looking for mind-share. Again, they were hugely overshadowed by US competitors like RSA, CertCo, Entrust and VeriSign - companies that had been in the security technologies sector for years and had well-established brand identity.
Last year, a significant player in the European security market and, at 280 people, much bigger after merging with British company Zergo, they brashly decided to co-sponsor the RSA. There they were, the Baltimore name and logo printed on all the conference materials, pitching themselves again as if they were much, much better known, getting attention by hosting yet another punchy party in, of all places, a San Jose billiards hall.
As so often with the company, their timing was perfect. Last January, the RSA conference, an enormous industry event of 5,000 attendees in San Jose, pointed toward the strong growth of PKI - public key infrastructure - the complex security infrastructure in which Baltimore specialises.
Since then the company has taken on another 200 employees and effectively taken over management of the company, displacing the Zergo executives originally in several key roles. That move didn't surprise many observers, given that Zergo had very little name recognition outside Britain (one reason the merged company opted for the name Baltimore, not Zergo) and that its share price had slid since it went public. In contrast, Baltimore shares for the combined company have been on a hefty rise since the merger, and the market has reacted favourably to its recent Nasdaq launch as well.
The rise and rise of the company has occurred under the watch of Mr Rooney, who bought up the then tiny Cork-based company in 1996. With a background in information technology and security, Mr Rooney was fishing for an appropriate investment that he could also run himself.
"I actually looked at quite a number of companies as potential investments," he says. Because of a fascination with the security end of technology, he snapped up Baltimore - which had a paltry £50,000 in revenue in 1996 - for well under £500,000, with a significant investment coming from Mr Dermot Desmond. The company's current market capitalisation is £1.6 billion (€2.03 billion).
Mr Desmond sold £55 million worth of his shares two weeks ago, prompting some speculation that he knows something the rest of us don't. But Mr Rooney expresses no surprise that the well-nown investor would cash in on his prize investment with shares at a post-Nasdaq launch high.
If anything, he says, Baltimore is geared to reap the rewards of having pushed hard into the US market. He says 20 per cent of the company's "virtual pipeline" - potential sales they believe they'll realise this year - is in the US. Much of this followed directly on their RSA visibility in January, but deals in the security sector take a long time (nine months or more) to realise, as potential clients weigh up alternative systems.
Baltimore has also forged a set of high-profile alliances with notable companies like Sun, Siemens and Unisys, with the just-nnounced Unisys deal involving an unusual plan to supply security software for e-commerce transactions in China.
Still, the US space is where they'll need to perform, says Mr Rutstein. "It's going to be an uphill battle because folks like VeriSign have spent so long" establishing a trusted presence in a sector in which trust means everything, he says. "I think [Baltimore] will be a player, no matter what. I don't think they will be a dominant player, at least in the US."
Mr Rooney's job now is to prove such assessments wrong. A controlled, determined figure who says he never lies awake at night with business worries, Mr Rooney will once again push his company to perform according to his favourite motto: "get big fast".
Klillington@irish-times.ie
