In late September a new company named IDtech360 announced the official start of its operations. Aiming to bring major international players in the biometrics industry to the United states markets, IDtech360 connects those who are looking for next generation identity management with the vendors and solutions best suited to their needs.
FindBiometrics president Peter O’Neill had a chance to speak to Seth Miller, IDtech360’s founder and CEO, about his business, the need for overseas biometrics companies in America and the specifics of the education market.
Peter O’Neill, President, FindBiometrics (FB): You have just launched a new company IDtech360, can you please tell us about your new business?
Seth Miller, Founder and CEO, IDtech360: Absolutely. IDtech360 is the end result of my global travels over the past ten years working in the biometric space and as the former director of International Business Development at Lumidigm. I was tasked with going out and integrating Lumidigm’s components into various identity schemes, whether they were access control or identity management, across a government platform or an enterprise platform. When I came back to the US after these travels I realized that the companies that were having the most success in our industry overseas were not represented here in the States. When I dug into it even deeper I realized that the biometric product offering here in the US, for the most part at the commercial level, were really subpar. So I decided that I would like to open a channel for these foreign technology companies that weren’t here in the States for various reasons – they didn’t have the capital to do it; they didn’t have the wherewithal to enter the US market alone, which is very intimidating for a number of overseas groups – so I decided I would bring them into the States. We would provide a focused sales and marketing effort to both system integrator groups, security solution groups and most importantly to us because this is our niche, to the education marketplace where we have specific experience and credibility.
FB: Why the focus on the Education market?
IDtech360: I view schools and college campuses as micro cities. I believe there is not only a good use case but more importantly a strong return on investment. They have access control applications, they have time and attendance applications, they have meal management applications, they have applications whereby they need to verify identity at testing facilities. I look at this and say that is an area where nobody appears to own – here in the States, within the biometric industry – and that is an opportunity for us to bring these technologies into the US to a focused market.
When asked why I am bringing this company to market, I do it because of a number of things: number one, I believe there is a lot of pent up market demand for some newer technologies to curb the rising cost of identity fraud; number two, there are some really good technology groups around the world who should be represented here in the States but are not. It has been my experience that when we took those companies and we competed against the biggest companies that do have a presence here in the States, we typically beat them. So why wouldn’t we be here in the States? Third, it is important that the market has options for different types of biometric modalities. Sometimes for example, some end users are weary of touching fingerprint sensors that other people touch as well, so in these cases, we offer non-contact solutions like IRIS or facial recognition. At the end of the day, the market needs solutions and the market needs options. That is what we do.
Finally, I want to jump ahead of the technology adoption curve whereby I know the more developed nations, United States, Western Europe are typically the laggards, the last ones to adopt newer technologies. I believe I know what is coming because I have seen it deployed in second and third world countries where the cost of not deploying advanced technologies far exceeds the cost of deploying these solutions. I want to bring the best biometric technologies that I have identified here to the United States. I know that the market will show that there is real interest in these technologies when presented correctly.
FB: You were talking a little bit about some of the main drivers behind your start up, the fact that international companies do struggle and sometimes have a very difficult time bringing their product to market especially when they are global operation anyway and they are having to do the same in South America, Africa and in the Middle East and wherever they are trying to push out. So it makes sense to me. How many clients are you starting with?
IDtech360: We have a number of partner companies that we are going to launch with, but for the most part there are three primary groups. Union Community, which is the Virdi brand of fingerprint sensors, access control terminals, time and attendance applications. Virdi will be our primary fingerprint based access control and time and attendance supplier. Iris ID, we are partnering with as well for iris recognition. We believe they have very good and well established technologies and a true understanding of what the market needs.
We are also in the process of bringing in MODI Optical Solutions onboard for their facial recognition systems. I really like MODI because they are doing things differently like recognizing image quality and the environment that people are using that technology in is a big issue. What MODI has done that I really like is, instead of moving the camera to get a proper shot of a person’s face, they are using mirrors and magnets to basically pull the image from wherever it is to the camera itself. The benefits being that we are now able to get really strong facial recognition images in various lighting conditions which seem to be a big holdup.
So, my three to start will really be Virdi, Iris ID and MODI. I also of course have a long history with Lumidigm and a number of relationships around the world and so we will be working with some folks on the integration and sale of Lumidigm’s products where it’s appropriate.
FB: That is very exciting that you have such a broad range of offerings coming out of the gate. Congratulations on that because that is a critical component for your success I think and you have it pretty well covered off. Will your sales efforts mainly be focused on the US or North America or are there plans to move more broadly than that? I’m just thinking of a company that is based in Eastern Europe and they want to expand around the world, North America being one of those opportunities, but the UK and other areas too. Will you be able to assist in that regard as well, or is your main focus at launch to work in the North American market?
IDtech360: Right now at launch our focus is on the North American marketplace and I feel very good about that given that North America represents over 20 percent of the global economy and it is probably one of the most underserved markets from a biometric standpoint. So today, yes, our focus will be in North America, specifically in the United States, but of course we won’t say no to anybody who wants to purchase from wherever. Those groups who are looking for expansion assistance in foreign countries, I hope to get there in the next few years whereby we can take the model that we have demonstrated successfully here in the States and just replicate that in other areas.
FB: Well Seth, I think that makes sense especially when you are focusing on a vertical market that like education. The educational needs will be very similar across the globe so once you have sort of a proven success model in North America where universities and schools are using biometrics to enable all the things you mentioned earlier that would have to work as well in the UK, South Africa or wherever you take it globally.
IDtech360: Yes, absolutely. The problem that the biometric industry is attempting to solve is the problem of accountable identity control, (AIC as we call it). A key card or a pin number lacks accountability because it can be lost, or stolen, or shared, or whatever. Biometrics have that accountability. We close the loop.
If we have one underlying mission at this business it is to promote technologies that help curb the costs of broad scale identity fraud. Now, that being said, if we solve a problem in a healthcare facility or in a college campus or in a bank, I know that that is the same problem in all banks, all healthcare facilities and in all education facilities are experiencing globally.
I had a wonderful experience back at Lumidigm where I identified an opportunity with a private health insurance company in Saudi Arabia. Now their problem is exactly the same as all the other insurance companies across the world. Jane Doe gave three natural births in a single 12 month period, which is physically impossible, but Jane Doe was sharing her insurance card and the people left paying those bills are the insurance companies and the hospitals. So if we can help curb the amount of fraudulent activity going on and recoup some of the lost dollars I think we will be in a better position all the way around.
FB: I couldn’t agree more. We have that similar problem in Canada with our health system where people are sharing cards and it is quite serious. The ROI solution on that is quite enormous.
IDtech360: I read a statistic not too long ago that said the FBI’s best guess at how much fraud exist within Medicare billing alone is 3 to 10 percent, given the United States total Medicare expenditure was $565 billion in 2011 that puts the cost of fraud in this system alone anywhere from $17-$57 billion. The last time I checked, our healthcare system could use an extra $17 billion a year. I’m not going to assume that our technologies, or any biometric technology, would eliminate all of the issues, but I think if we start implementing technology today that starts curbing the costs and reigning in control and bringing in more accountability and convenience to the market then I think we will see a positive impact.
FB: Seth how will you be handling sales support and training?
IDtech360: Great question. Sales support is primarily on my docket of responsibilities today, so as integrators, dealers and reseller groups sign up with us, then I will be spending time going out and doing sales training for those sales teams and probably a little bit more in depth training for their “trainers.”
Now, for our training program, I recently hired Mason Miller as Vice President of Operations. Mason has a PhD in education systems and on top of bringing a lot of accountability in the higher education marketplace because he knows that world – knows the problems, he has run schools and school districts. We have a lot of knowledge there.
Mason is tasked with putting together the partner training program whereby we will be doing ongoing training either off site or at our facility. People will come into our facilities where we will have a two or three day training session in which we go through and train everyone on a more technical level on the use of these technologies, how you set them up, how you manage the enrollment the de-enrollment and troubleshoot basic issues. We have a relatively thorough training program that is being put into place to make sure that everyone is really well educated. The education piece is huge here. Many people are afraid to use the technology because they don’t believe that it works. With the education piece, and showing everyone exactly what belongs where and when and how to use it, I think we will have a much higher chance of success.
FB: Seth, thank you very much for telling us about your new company. It sounds like you have all of the elements to really attack this marketplace. There is obviously a demand for this type of opportunity and I look forward to chatting with you in the future with how things are progressing down the road.
IDtech360: Thanks Peter I appreciate it.