Sramana Mitra: What open problems or gaps do you see that are not addressed today?
Joseph Beal: One of the major issues we’re having, if you go back to BYOD [bring your own device], and the influx of mobile applications that people want, you’ll see. Look at the smartphone. It’s basically got applications you can use even if you want to manage your bank account. If you want to manage parking in D.C., we have an app now that you can download and say, “I’m parking here. I’ll pay for that automatically.” >>>
Sramana Mitra: Let’s talk about information security as it applies to the government and from the perspective of the cloud. What are the key drivers? What is the government’s level of concern about cyber crimes, and what are the drivers in that situation?
Joseph Beal: We focus a lot [on] APT, which is advanced persistent threat. Are such threats the nation states that are trying to get in and pull our information out? Are they the hactivists who are trying to make a name for themselves or just trying to penetrate systems? Are they criminally driven, financially backed cyber criminals who have the ability to pull the information for their own financial gain? >>>
Sramana Mitra: I did not realize that the government uses telecommuting.
Joseph Beal: Yes. It’s a driver. It’s a way for them to cut down on time, and they can work more efficiently.
SM: I just want to clarify: Is that something that you predict will happen or is it happening?
JB: We’re in the process. There are a lot of as-a-service offerings that the government provides that have been driven by telecommuting. There are a lot more policies across various agencies where people allow their staff to work from home or work remotely and not have to drive into the office, which could take two or three hours, and then drive home. It’s a quality-of-life issue, too, but from the government’s side, they’ve seen a lot more efficiency. A lot more work is being done because employees have access to the services they need as if they were in the office. >>>
Last week, SaaS-based enterprise services provider Workday (NYSE:WDAY) finally went public. According to Fortune/CNN Money, its IPO was among “the largest venture-backed IPO since Facebook.” It sold 22.8 million shares at $28 each, raising $637 million through the IPO.
CCSi is a 20-year-old company that serves only the needs of the U.S. government. That’s quite a hefty client for anyone to handle. The U.S. government requires all the same types of support as any other organization. Since the information it handles is much more sensitive that what the average company does, CCSI has its work cut out for it.
Sramana Mitra: Hi, Joseph. Let’s start with your background as well as some context about CCSI. >>>
A Gartner report, Market Trends: Cloud-Based Security Services Market, Worldwide, 2012, estimates that the cloud-based security market will be worth $4.2 billion by 2016. Researcher IDC is more optimistic: One of its reports on cloud security–based solutions estimates a compounded growth rate of 16% over the period 2011 to 2015, projecting that the market will grow from $5.1 billion in 2011 to $9.3 billion in 2015.
Sramana Mitra: So, you do deals whereby you bring new products into your channel on a revenue-sharing basis?
Chris Gatch: A lot of the services we sell to our customers are with third-party partners. Our desktop security product was delivered in partnership with F Secure. Our desktop backup product is in partnership with a large cloud-based storage provider. For a lot of those, we might white label them and sell them directly as Cbeyond products, but that’s not always the case. There’s still product development effort on our part to communicate an offer like that into our base, productize it, and have the ability to support it and all that. It’s not a long tail. There are targeted opportunities for us, and therefore there are not tons of them that we do. But we do have a history of doing revenue sharing with partners; it’s just select on our part. >>>
Sramana Mitra: It’s very exciting that small businesses can afford technology at a completely different order of magnitude.
Chris Gatch: Yes, it’s amazing. The capital required to start businesses now is dramatically less. The dollars involved in VC rounds have gone down as a result of cloud technology. What’s cool is that the stuff the progressive entrepreneurial set – you know, these born-on-the-Web companies – have been taking advantage of for a few years is now moving even to the Main Street small businesses, which is where I’d say we live. We’re the average small business. It’s cool to see it making it down to those kinds of companies. >>>