Protecting Companies from Cybersecurity Threats
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VirtualArmour International Inc (CSE:VAI,OTCQB:VTLR) is a small-cap cybersecurity and professional services company that designs, implements and manages proprietary solutions for businesses looking to protect themselves from cybercrime. Cybersecurity Ventures reports that “global cybersecurity spending will exceed $1 trillion from 2017 to 2021,” and VirtualArmour is making itself known by addressing the needs of clients from multiple sectors including energy, healthcare, retail, finance and service provision.
In a time where breaches like that of Equifax can no longer be seen as one-off events, the use of managed services in cybersecurity has seen notable growth in the last year. Reflecting this, VirtualArmour’s managed services recurring revenue is on track to exceed 100 percent year-over-year growth.The company’s expected managed services recurring revenue under contract is $10 million, supporting an expected 35 percent year-over-year growth in total revenue. Looking to the future, VirtualArmour will invest its proceeds into further developing its solutions, expanding its client base and enhancing its market presence through further promotion.
“The global market demand for tailored cyber protection services continues to increase and this is accelerating adoption of the company’s recurring revenue service offerings,” said VirtualArmour CEO Blisard. “The heightened enterprise focus on cybersecurity has not only led to increasing budgets being allocated to cyber protection, but also increased interest in investment opportunities in what is a high growth sector.”
VirtualArmour implements protection practices to enhance the growth of its many clients—including a Fortune 100 oil and gas company and a 13-location datacenter provider. The Company is becoming recognized as a key player in the market having been recognized in Branham300’s Top 25 Movers and Shakers list and also ranked on the Cybersecurity500 list, which highlights high-performing cybersecurity companies across the world.
The Company’s management team is one with vast experience in developing organizations through service excellence and talent and cost management. Additionally, as the majority shareholders, both co-founders are also highly invested in the Company.
- 35 percent year-over-year growth of topline revenue
- Recurring revenue as percentage of total revenue currently at 30 percent
- Managed services recurring revenue on track to exceed 100 percent year-over-year growth, expecting recurring revenue under contract is $10 million
- 95 percent client retention rate
- Growing cybersecurity market with expected $1 trillion in spending by 2021
- International customer base including Fortune 100 oil and gas company and 13-location datacenter provider
- Experienced executive team with proven track record in growing organizations
- Proprietary CloudCastr client portal and prevention platform
- Established the VirtualArmour Academy at its security operations centers in Salt Lake City, Utah and Middlesbrough, England
Harnessing a Growing Cybersecurity Market
In light of significant data breaches including the recent Equifax incident, businesses are now more than ever looking for managed cybersecurity solutions that protect the integrity of their services. It is expected that cybersecurity spending will exceed $1 trillion between 2017 and 2021 as companies try to mitigate what Cybersecurity Ventures projects to be $6 trillion per year spent on cybercrime damages in the same time period. This upsurge in cybersecurity initiatives will also significantly increase the number of available jobs in the space to an estimated 3.5 million by 2021.
As companies primarily tend to outsource cybersecurity services, VirtualArmour is working to enhance its local influence in the Western United States as well as its global presence, delivering managed security services to a plethora of multi-national clients that manage highly sensitive data. “The most fertile ground for us is enterprise mid-level organizations, Fortune 1,000 and Fortune 2,000 organizations that aren’t looking to bigger managed services providers like Deloitte,” said Blisard. “Our customers include O3b, DigitalGlobe, JBT, Cologix, Western Union and Adobe.”
As is commonplace for cybersecurity and technology service providers, VirtualArmour is bound to conceal the identity of some of its more significant clients. The primary client sectors and the cybersecurity concerns that VirtualArmour is helping to address are outlined below.
Energy companies with a widespread national or global presence require high-performing networks that serve both employees and customers alike and support the organization by enhancing decision-making, reducing timescales and refining the distribution of energy. Insecure and vulnerable legacy networks often used by energy companies bring a significant operational risk to the organization from cyber attacks that can be motivated by extortion, environmental activism, terrorism and initiatives from other countries to disrupt a nation’s energy supply.
In the energy sector, “attackers can impact the entire business, causing a malfunction in heavy machinery, bringing the production process to a screeching halt, venting toxic materials into the environment, violating international environmental treaties and/or exfiltration of employee confidential information.” says VirtualArmour regarding potential breaches to the sector.
The healthcare industry is highly regulated as it is responsible for securely storing highly sensitive and personal patient information while also interacting with a vast number of third party organizations. Additionally, as the industry has become more digitalized, there has been a movement to ensure that this information can be readily available across multiple devices including mobile phones, computers and, in some cases, medical equipment. If this data is not properly secured, or at the very least managed with Network Access Control, there are risks associated with unknown parties having access to sensitive or unencrypted information available on devices that are easily stolen.
As consumers exponentially shift into the realm of online and mobile shopping, retailers have had to enhance their technological and online presence while also being far more cautious about protecting their data and that of their customers. As many retailers are still playing catch-up with regards to the size and ability of their IT teams, these companies are facing gaps in their network security infrastructure, potentially compromising customers’ personal and credit card information.
Additionally, in attempting to make their brick-and-mortar establishments more appealing to younger shoppers, retailers have opted to offer in-store wifi, which, if not properly secured, can act as a gateway into the Company’s servers.
It is no secret that financial institutions are responsible for managing high levels of sensitive information including names, social insurance/security numbers, addresses and more. Once this information is taken, there is no way of getting it back and financial institutions have no way of remedying the situation for their clients, leading their own reputation to suffer greatly as a result. As they face increasing pressure and strict compliance timelines from regulatory bodies for ensuring the protection of their data, financial institutions have been working proactively to increase the security of networks and databases, and there is still more work to be done.
Service providers like lawyers, management consultants, auditors and others are often granted access to sensitive client information that can include employee data, internal finances, proprietary information and more. In order to guarantee the safety of this information, service providers need to be equipped with reliable and secure networks, mitigating any breaches. Not doing so leaves their clients at risk, but also puts the service provider at risk from both a legal and reputational standpoint.
Marketing and Advertising
Companies that use the web and social media as advertising platforms for their businesses are also at risk as cybercriminals have developed fraud networks that manipulate viewership numbers of videos, for instance, to fraudulently earn thousands of dollars in advertising rates. “Companies will continue to spend money online in an effort to acquire new business, and because of this and the growing cyber threat, these types of programmatic platforms which generate significant revenues will need to be increasingly sophisticated in their monitoring and evaluation of security threats,” noted VirtualArmour VP of Engineering Chad Schamberger.
How VirtualArmour Secures its Clients
Businesses are looking to experienced managed services providers with global reach for cybersecurity solutions.VirtualArmour has established a strong international presence, with key Security Operations Centers that serve clients 24 hours a day, seven days a week, 365 days a year in over 30 countries, across five continents.
Managed and professional services
VirtualArmour offers tailored managed and professional services with an approach to protection that is personalized, strategic and supported and monitored by industry specialists and best-in-class technology. The Company ensures that each client enters into a one-to-one relationship with a lead engineer who is focused on delivering highly tailored solutions. Understanding that the human component is integral to the development of a robust cybersecurity culture, VirtualArmour works closely with its clients’ employees to develop the appropriate solutions for their organization.
Clients are also given access to VirtualArmour’s proprietary CloudCastr portal, which acts as an easily navigable personal dashboard for clients looking to have a central source of information regarding their security position.
The Company also prides itself on being a leader in client responsiveness, ensuring that tickets are responded to within a 15 minute time frame by engineers stationed in the Security Operations Centers that operate under a “Follow the Sun” model. This ensures that issues are addressed as they happen and that the client is protected at all times as a result.
VirtualArmour has been successfully developing its presence as a managed and professional services provider, with associated recurring revenue growing over 50 percent in the first half of 2017 and expected to exceed 100 percent year-over-year growth. By the end of 2017, the Company is anticipating $10 million in contracted managed services revenue.
Investing in growth
With increased revenue resulting from the growth in demand for cybersecurity solutions and managed services, VirtualArmour is investing in initiatives to ensure it can continue to scale appropriately and effectively address the needs of its clients. To start, the Company will increase the size of its sales and technical teams, introducing additional experienced personnel.
VirtualArmour also has its sights on expanding its market presence through capitalizing on current client relationships as well as investing in growing brand awareness, pursuing strategic partnerships and engaging in lead-generation activities. Lastly, the company will be continuing its R&D initiatives so as to develop further platform infrastructure. This will be supported by a new Security Operations Center that will be established in the Company’s Denver headquarters.
Chris Blisard is a co-founder of VirtualArmour and has more than 25 years of business development, leadership and operational experience in software development, network security and cybersecurity in both the public and private sectors. He has also led Circadence as COO since 1999 and has served on many boards as both chairman and director.
Todd Kannegieter is a co-founder of VirtualArmour and has over three decades of finance and accounting experience. He has also served as VP of Finance for Circadence Corporation since 2001. Todd is responsible for the overall financial management of the Company, its financial reporting, and for multiple corporate functions including investor relations, treasury management and long-range financial planning.
Before joining VirtualArmour, Armbrust served as vice president of business development at Axis Technical Group, a Microsoft Gold Partner and trusted business IT advisor to leading companies in the mortgage, title, healthcare, oil and gas, and financial services industries. Earlier, he served as vice president of operations and later as vice president of business development at Seeing Machines, a world leader in computer vision technologies.
After joining VirtualArmour in 2007 as a senior engineer, Douthwaite was promoted to director of engineering services in 2012 and then to vice president of managed services in 2015. Based out of VirtualArmour’s UK office, he has led the growth in the company’s managed services business from two to more than 30 managed service customers. Earlier, he was a web developer at TeleWare after beginning his career as a software developer at Intex. He holds a computing and software engineering degree from Leeds Beckett University.
Michael Panec most recently served as chief operating officer at Innovest Systems, a provider of technology-driven services for trust and wealth management companies and investment advisors. He earlier served in several roles of increasing responsibilities at Innovest, including as COO of its payment and fulfillment divisions, CFO of the Trust & Wealth division, and as director of technology. While serving as CFO of the Trust & Wealth division, he formalized its financial reporting and accounting function, and established standard practices to support growth and promote efficiency.
Before Innovest, Panec served as technology director at Optech Systems, where he was responsible for systems development and participated in the launch of a mutual fund trading platform that lead to a joint venture and eventual profitable sale. Panec earlier served as vice president and manager of technology at Bankers Trust Company and Security Pacific National Bank.
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