Boardroom
Gemalto

In The Boardroom With...

Ms. Kate Fortney
Director - Government ID & Security
Gemalto
www.gemalto.com
OTC:GTOFF.PK

SecurityStockWatch.com: Please give us an overview of your background and your role at Gemalto.

Kate Fortney: Over the past 30 years, I have developed product and service solutions for clients in telecommunications, enterprise information management, and business process management. I have spent the last nine years working in the federal market exclusively, serving as a vice president for divisions at SAIC, ACS, and Aspen Systems.

As a director for Gemalto in Identity and Security Public Sector, I am responsible for identifying, evaluating and nurturing emerging digital security opportunities in both existing and new markets. My efforts are primarily focused on marketing, developing, and sustaining relationships with other companies that typically serve as the prime integrator in a federal procurement. Solutions that authenticate identity for physical and logical access are complex and often require hardware, software and labor beyond the card management sub-system provided by Gemalto. We are successful because we are able to integrate and partner with any prime to create a holistic solution.

SecurityStockWatch.com: Gemalto is the newly formed combination of Axalto and Gemplus. What are the capabilities of the new entity?

Kate Fortney: Combining the strengths of market and technology leadership, Axalto and Gemplus merged to form Gemalto, a world class leader in the digital security. The new company had pro forma 2005 annual revenue of $2.2 billion, operations in 120 countries and 11,000 employees, including 1500 R&D engineers.

Gemalto creates and deploys secure platforms, portable and secure forms of software in personal objects such as smart cards, SIMs, e-passports, readers and tokens. Over a billion people worldwide use Gemalto products and services to:

  • Identify themselves for access to corporate and government networks and buildings,
  • Authenticate and pay online while protecting identity,
  • Communicate, share and access content via mobile devices.

The combination of the two leading companies is resulting in several significant synergies:

  • Increased efficiency in production and supply chain
  • Ability to leverage global facilities for increased flexibility and site specialization to meet client needs
  • Acceleration of manufacturing process improvements through the exchange of best practices
  • Strengthened efforts to develop new products and faster commercialization of products in identity, security and payment markets, as well as the development of customized solutions for clients

SecurityStockWatch.com: What are the key market drivers for the Secure ID market at this time?
I think there are five major drivers that will shape how fast and to what degree the Secure ID market evolves:

1. Homeland Security Presidential Directive -12 (HSPD-12): A majority of federal agencies have achieved the milestone of issuing a HSPD-12 credential by Oct. 27, 2006. What remains to be seen is how aggressively the various agencies pursue a full issuance of credentials to all federal employees by October 2008.

2. Development of new applications: Once federal agencies have rolled out HSPD-12 within their organizations, another market driver will be the development of new applications beyond authentication. The existing memory within the microprocessor –based smart card’s chip can already support other uses. Beyond convenience, multiple applications using one infrastructure present agencies with opportunities to leverage existing infrastructure for efficiency.

3. Adoption of the FIPS 201 standards in other markets: HSPD-12 has created a broad-based standards (FIPS 201) that can facilitate interoperability beyond the federal marketplace. By the due date for full implementation, all federal employees will carry this credential. HSPD-12 standards will also be used by Transportation Security Administration within the Transportation Worker Identification Credential (TWIC) program of port security credentials. As other new programs are developed compliance with the same standard will make interoperability more of a possibility and less costly. With standards now in place and critical mass being provided by the federal market, states and corporations are beginning to seriously evaluate and plan for the use of smart cards as credentials.

4. End-user confidence: A fundamental driver has to do with the confidence of the end user. All of the programs being implemented or evaluated depend to some degree on the individual’s comfort level with the security of the products and the process, and privacy protection of his or her information. Communication programs are needed to educate end-users about the technology and to explain how processes will be managed to ensure both security and privacy.

5. Commercial support: Finally as a result of these large government programs, many large system integrators and technology companies have added support for smart cards into their solutions. This makes it easier for enterprises and government to implement and use them. It also means these companies are becoming advocates for the use of smart card technology for IT security, managing network identities and regulatory compliance.

SecurityStockWatch.com: Please give us an overview of Gemalto’s activities in the Government market.

Kate Fortney: Gemalto provides a wide array of government solutions, both in the US market and internationally. The environment and market needs are somewhat unique in the US market, so I will highlight our major programs in the U.S. first:

  • The DOD Common Access Card (CAC) was implemented in 2000 as a personal identity credential for U.S. military personnel. Gemalto has delivered the majority of all devices to DOD, providing 11 million cards to date. Gemalto is continuing to serve as a primary card vendor for this program as the DOD CAC is migrated to the HSPD-12 standards.
  • Gemalto is currently providing cards for the TSA’s TWIC Phase III pilot program that is used for port security. In addition to providing the smart cards, Gemalto also implemented both the card management solution and the personalization facility currently used by TSA to manage the program.
  • Gemalto will begin providing the new electronic passports to the U.S. Department of State for U.S. citizens beginning this year. To date, Gemalto has enabled more than 3 million ePassports worldwide with its secured chip-base technology.
  • Gemalto is one of the primary participants fulfilling the needs of the HSPD-12 mandates for federal agencies. Gemalto offers a complete Federal Information Processing Standards (FIPS) 201 compliant, GSA approved card management sub-system, including cards, applets, middleware, readers and card management software. The Gemalto HSPD-12 solution has been implemented to support the GSA Shared Services solution, which supports over 40 agencies.
  • Both Texas and New Mexico have implemented electronic smart cards to replace the paper-based voucher system used in their Women, Infant, Children (WIC) programs. The smart cards provided by Gemalto store food benefits data and offer convenience and quicker reimbursement, and help to eliminate fraud.
  • Registered Traveler is a privately funded, TSA regulated program in which participants voluntarily undergo a background check in order to gain faster security processing at airports. Gemalto participated in the initial pilots and will provide cards to system integrators as individual airports implement the program. Two new contracts have recently been awarded.

Internationally, Gemalto has participated in all major government programs that utilize smart cards, including:

  • National IDs for Finland, Sweden, Belgium, Austria, Tunisia, Singapore, UAE and Sultanate of Oman
  • Electronic Passports and Visas for Czech Republic, Singapore, Sweden, Poland, Russia, Solvenia, Finland and Lithuania
  • Drivers License and Car Registration for Argentina, El Salvador and India
  • Immigration IDs for Singapore, Philippines, Colombia and Mexico
  • Health IDs for Belgium, Solvenia, France and Germany

SecurityStockWatch.com: We understand that the Citizenship and Migration Board of Estonian Republic selected Gemalto for its’ future electronic passport. Without divulging any confidential or sensitive information of course, can you give our audience an overview of this deal?

Kate Fortney: Under the terms of the contract, Gemalto will provide the Estonian authorities with a turnkey solution, including:

  • Manufacturing and binding the passport booklets with a powerful microchip for biometric identification,
  • Implementation of the personalization system in the premises of the Citizenship and Migration Board under the Ministry of Interior
  • Enrollment software and equipment for capturing and digitizing the data, picture and signature.

This solution meets the needs of customers requiring extreme security, such as biometric and visual passports, electronic and visual ID cards, driver’s licenses and health cards. First deliveries are scheduled to start in early 2007.

Many countries worldwide are expected to start nationwide rollouts of their biometric passports during the course of 2006-2007. With strong references and a global footprint, Gemlato has the most complete product and service offer in the emerging identification market. Current ePassport references include the Czech Republic, Denmark, France, Norway, Poland, Portugal, Russia, Singapore, Slovenia, Sweden, and the United States. To date, Gematlo has enabled more than 3 million ePassports with its secured chip-based technology.

SecurityStockWatch.com: We understand that you will be speaking at the Advanced Identification Systems Conference in December. May we have an overview of your key issues and trends you’ll be discussing?

Kate Fortney: I’m going to address four major areas. First, I am going to give the audience an overview of how the use of secure identity devices has evolved in the federal market. I’ll then discuss the next phase of deployment for existing programs and new programs which are in the initial stage of competition. And I will wrap up with comments on future applications and technology that are expected to develop.

SecurityStockWatch.com: Anything else you’d like to mention?

Kate Fortney: Yes, we are very pleased that Gemalto has received seven nominations for the Sesames Award at this year’s CARTES tradeshow, the premier international smart card industry event. These nominations demonstrate our leadership in secure personal devices, user centric software and value added services.
The nominations are for:

  • GemBorder Inlay, a new radio frequency antenna solution
  • Innovation in IPv6 embedded stack into a smart card
  • PC-Link.sim, a Windows OEM application for mobile subscribers
  • GemInstant, a much smaller contactless payment card
  • FireFly, a pioneering technology for contactless card visual effects
  • ChipSwipe, a pocket handlheld reader to dynamically encode magnetic swipe cards
  • SIM Strong, enhanced security for mobile devices to access online content

The awards celebrate the unique contribution and investment of leading industry players like Gemalto in developing next generation products and solutions for the digital age.

To learn more about Gemalto and our products, please contact me at Kathleen.fortney@gemalto.com or visit www.gemalto.com.