Absolute cashes in on ‘persistent’ technology as opportunities rise for mobile

As the cliché goes, there is success in persistence. For Absolute Software Corp., it's in “persistent,” unerasable software. A Canadian company based in Vancouver, Absolute sells software that allows companies and consumers to locate lost or stolen mobile devices and laptops. Twenty years since its founder created the company after his own laptop was stolen, Absolute, now with international offices, inked a major deal this year that involves installing its software on millions of Samsung Electronics Co. Ltd. devices per month. Todd Leeson, vice-president of business development and mobile strategy at Absolute, said in a telephone interview that Absolute’s products are unique because they are embedded in a device’s BIOS, or basic input/output system, which tests a computer’s hardware components and loads its operating system. This makes the product “persistent,” he said, because it can't be erased through traditional methods. “If the device is stolen and the hard drive is reformatted, the reinstalled, or the device is factory reset and the agent is removed, our solution actually self-heals and rebuilds itself on the device,” he said. “There’s that constant digital tether on the device, where a company can always reach it, always connect to it and always track and secure it.” Once activated, the program, or “agent,” runs a “health check” on a laptop each time the computer is turned on, Geoff Glave, Absolute's senior product manager, said in an interview. If the check shows someone has tampered with the Absolute program, he said, the code re-installs the agent and notifies Absolute. The company also has products to remotely secure a stolen laptop, locking the device or erasing sensitive data, and notifying law enforcement of the device's location. Absolute said in March that it has recovered more than 28,000 stolen computers over the past 20 years, about 450 per month. The company is now moving into the mobile device space. Under its latest deal with Samsung, announced in April, Absolute’s security technology will be pre-installed on smartphones for the first time, Stephen Midgley, Absolute’s vice-president of marketing, said in an interview. According to the agreement, Absolute's technology will be installed in the firmware of new Samsung Galaxy smartphones, including the Galaxy S4, which sold 10 million units worldwide in its first month on the market, Samsung told Bloomberg last week. “What that’s really done is take the technology that exists on laptops and extends that to smartphones,” Midgley said. “We did a deal last year with Lenovo for some of their tablets, but Samsung represents the first time our persistent technology has been built into smartphones.” Glave said the technology is embedded in tablets' and smartphones' firmware, rather than on a BIOS chip. As with its laptop technology, he said, Absolute’s smartphone technology is virtually unerasable. “When the phone is back to its set-up screen, the only thing left on the phone is the base image that was put on there by the phone manufacturer with the tweaks the telephone carrier would have added,” he said. “We are in the firmware of the phone so that when you reset it, then all your apps are gone but the agent is still there because we’re in that base image on the phone.” Leeson said Absolute also has a product distribution deal with Apple Inc. for “non-persistent” Absolute protection products, designed for Apple’s iOS mobile operating system and devices, on sale at Apple stores. He said it’s difficult to know how many devices in the market use the company’s security software, since many laptops—and now smartphones—contain the software even if it’s never activated. Even when the technology is pre-installed, Leeson said, it does not become active until the device owner signs up for a one-year or three-year protection licence, which sell for between $14 and $50. “The number of licences that have been sold is also very significant,” he said, noting that at least one million devices have licences. MacDougall, MacDougall & MacTier telecom analyst Troy Crandall said in a telephone interview that Samsung’s partnership with Absolute will help the company market its Galaxy line of smartphones to enterprise clients. “One of their weaknesses, and one of the reasons they weren’t doing so well on the enterprise side, is because enterprises want that deep security, and Samsung couldn’t offer it to them,” Crandall said. He said Samsung can now offer companies a wide range of security and control features for its fleet of phones, including one that provides access to secure documents by location. “For example, you’re going into a board meeting with your . You can have it so that when you enter a room, you’re able to look at all these documents, but as soon as you walk out, those documents automatically get deleted,” Crandall said. He said he expects Absolute to gain exposure through its “pretty substantial” deal with Samsung, which plans to ship 10 million Galaxy units per month over the next year. The deal, Crandall said, does not prevent Absolute from selling its security products to other smartphone manufacturers. BMO Capital Markets analyst Thanos Moschopoulos said in a May 8 research note that Absolute’s partnership with Samsung will play an “integral role” in driving growth at the company, and could add impetus for other device manufacturers to sign similar deals. The company's deal for iOS products, he wrote, “should also help to accelerate Absolute’s transition into the tablet/smartphone market.” Moschopoulos said that the company, which has 415 employees, had $19 million in overall sales contracts in the three-month period that ended March 31, 2013. That represented an increase of 1 per cent from $18.9 million in the same period a year earlier. Absolute said in its third-quarter 2013 financial statement that total revenues for the quarter were $20.9 million, rising 13 per cent from $18.4 million the same period a year earlier. Year-to-date revenue was $61.2 million, rising 11 per cent from $55 million from the same point in 2012. The company's stock closed at $7.16 Wednesday, which over the past year sank as low as $3.70 last November. Absolute also has a deal with Lenovo Canada, a North York, Ont.-based subsidiary of Chinese technology firm Lenovo Group Ltd., reached in 2005. It ensures the installation of Absolute’s device recovery and security technology on Lenovo laptops. The company also has deals with other laptop manufacturers, including Dell Inc.. and Hewlett-Packard Development Company L.P., Midgley said, adding that the company has worked with more than 6,700 law enforcement agencies around the world to help recover stolen laptops. Midgley said Absolute has room for growth as technology and the way we use it continues to change. He said the company—which now has offices in the United States, United Kingdom, Germany and Malaysia—will look to cash in as consumers and companies increasingly sync applications and accounts across multiple devices, a trend that will require information technology managers to secure multiple endpoints. “As long as there’s mobility, there’s going to be a risk of data being lost,” Midgley said. “So for Absolute, it’s a really good future in that sense, because the risks of mobility will only continue to grow.” —With reporting by Danika Grenier at dgrenier@thewirereport.ca and editing by Nicholas Kyonka at nkyonka@thewirereport.ca

Absolute cashes in on ‘persistent’ technology as opportunities rise for mobile

News | 05/29/2013 9:12 pm EDT

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