DENES BOLZA: What is the name of Opengear ’s game?
BOB WALDIE*: Secure remote control and management. The key word here is “secure”. We released our first industrial products, namely secure device servers - the SD 4000 line, last December. These servers include add-ons like our newly released SDT connector software, whose sole mission is to simplify the use of secure communications channels. We’re also involved in developing products that control classical IT infrastructure.
How do your servers work?
They enable you to remotely control, monitor and meter industrial equipment. Access is provided not over special secure networks but generically, over the public network of the Internet. Secure, encrypted and authenticated tunnels enable you to access information and control remote equipment extremely safely and simply.
What’s the benefit to the plant-floor engineer?
Our products enable you to simply and securely connect to and control all the systems on your plant floor – from any remote location. Using the same interface that you’re currently using – and without the need for remote hardware – you can be connected via your laptop, over your standard DSL link to your ISP, with a level of security that’s robust and iron-clad. It’s exactly the same as if you were standing in front of a console on the factory floor.
How does Opengear differ from the generic remote access facilities that are widely available?
The majors are building these features into their software operating systems, such as Microsoft’s Remote Desktop. Unlike us, these providers haven’t wrapped enough security around their remote access systems.
Why not?
It’s a question of complexity. Of course competitive products can provide the same basic function, which is remote communications, and there are third parties that sell security products. However, these tend to come out of complex IT environments. Opengear’s secure device servers are integrated, affordable and simple to use.
Is there anything else that you do differently?
Coming from the Linux world, we have an open source approach to what we develop. We encourage others to extend, modify and customise our software. And they are free to copy it to develop their own remote control solutions. Opengear’s value lies in our ability to provide the very best security solution possible, but if someone else can do it better they’re free to do so.
What are cost comparisons like?
Competitors typically charge more than double what we do. The market has been conditioned to accept that security usually comes at a high price. So vendors tend to charge more for security, even though no extra cost is involved. Half the security industry is about perception! Also, IT security guards are often complicated to use. Implementation involves lots of training and there’s a learning curve barrier.
Will prices come down?
They will reduce but they will never commoditise to a relatively small price point. When you operate hundreds of sites, the per unit cost is significant. If you only have one site, however, the issue of risk and return become important. If you only need to manage a single secure system, I’d probably go to an established supplier. If you want to remotely control hundreds of sites, then Opengear offers a customisable solution. Being a small firm, we’ve got innovative solutions, with the ability to be flexible and agile.
You’ve been described as a serial entrepreneur. Is that a good or bad thing?
I’m not sure. I tried to retire. I went fishing and bought a cattle farm but deep down I’m just a boring engineer. I love to develop new products and the only way to do that here is to set up a business.
What’s your business model?
Opengear is a start-up company. It’s only 22 months old. It was founded in Brisbane, where we’re based. We employ 10 people, four of who work in the USA, where we do the bulk of our sales and marketing. Our main office is in Utah and Florida. Engineering development takes place in Brisbane, and all manufacturing is done offshore in China.
Do you have customers in Australia?
We have customers here using our products to remotely manage their data centres, but none yet in the industrial sector. However, we do have industrial control customers in Germany, Japan and China. When we set up our manufacturing plant in China, our local distributor suggested that we apply the same security technology used in our data centre solutions to factory environments. China has a pervasive Internet infrastructure. It’s easier to get onto the net than it is to make a phone call. So remote control over the Internet is very attractive to the Chinese – and obviously there’s a hive of industrial manufacturing infrastructure going on there.
What are your primary target markets?
At this stage they’re healthcare and utilities. Privacy of client information is paramount in healthcare, where security is not only about keeping the bad guys out but the good guys too. In the infrastructure market, you’re dealing with remote control, where the consequences are huge if security fails, for example when someone accidentally opens a floodgate.
Is it a new area that you’re involved in?
While there is novelty in terms of industrial control, both our team and our technology go back a long way. One of the founding Opengear team members I first employed as an engineering graduate some 20 years ago. Back then we were developing data communications equipment. More recently, over the past 10 years, the Opengear team has been developing encryption and security products. Generally our background has been in the computer industry rather than in custom control, but the underlying technologies are the same.
Why would anyone buy products from a newcomer like Opengear?
For our technology and our people. We’re not in business with a short-term horizon. Our customers can be certain that we will succeed. We’re not going to move from the secure remote control niche we’re in. I am confident this market is going to expand, and we’re going to be riding that wave.
Why the optimism?
Secure remote control and management are increasingly important to doing business successfully. In the computer industry it’s increasingly important because, while the cost of hardware and software is going down, the cost of maintenance and downtime is zooming up. Similarly in the control industrial environment. Engineer and managers there are realising that secure access is not about protecting your assets but also about controlling your operating cost. This consciousness is growing, bringing with it growth opportunities.
Won’t potential users be scared off by the fear of your company being acquired?
The biggest risk to users is not that a company can get bought, but that it’ll go out of business – because of lack of experience or because it’s not committed to a particular endeavour. Of course, dealing with anyone small always has risk. So the customer has to work out whether the benefits are greater.
How do you see Opengear expanding in Australia?
We’re looking for partnership opportunities with people or companies where we can co-develop solutions. I see huge opportunities here where Opengear could develop custom remote management solutions in partnership with local customers, and then take those solutions to other customers overseas.
Will this goal be easy to achieve?
We don’t have a track record of many successful start-ups and development opportunities here, partly because we tend to be appliers of technology rather than developers. In engineering, we’re actually more just consumers than developers. Taking commercial or technical risks is not something Australians do very well, particularly engineers. Australians are individuals who do things very much on their own. As engineers, when we do develop or invent something, we tend to hold all our intellectual property close to our chests, as though it’s a gem. We look to protecting it and keeping it safe and proprietary. The reality is that there are probably a million other people who had the same idea at the same time. The secret to success lies in how quickly you can get your idea out there in the market and commercialise it. To do this you need to share your ideas and opportunities, and to take risks. So our great challenge is that we don’t do that naturally.
Why do you think we only take moderate risks?
We don’t need to take risks and we don’t have a culture where you’re compelled to maximise. This is part of why it’s so easy to have a pretty good life here. Everyone’s not trying to rip you off. People are reasonably straight. But the cost is that we waste so much potential. We have so much opportunity to develop world class technology solutions. And we are located down under in Asia, which is such an economic gem field. So while it’s good to see people enjoying the good life here, it is a shame our young people aren’t saying, “Let’s get out there and join the world.”
* Bob Waldie, chairman and CEO of Opengear , has a track record of successful entrepreneurship with open source ventures. Prior to co-founding Opengear, Waldie served as CEO and then chairman of SnapGear, a developer of embedded Linux security appliances. In 2003, SnapGear was acquired by CyberGuard, a NASDAQ-listed company. Before this, Waldie was CEO of Moreton Bay Ventures (a company he founded in 1996), which developed Internet messaging products. In 2000, Moreton Bay was acquired by Lineo Inc, where Waldie served as COO. Prior to Moreton Bay, Waldie was managing director of Stallion Technologies, a pioneering remote connectivity company he co-founded in 1985. Waldie has participated in a host of other start-ups, and served on the board of a number of private and public technology companies, and government industry bodies.