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SteelCloud,
through its agreements with Computer Associates and Microsoft has developed a family of
software appliances for the rapidly growing network security market
Technology
Computer Hardware
(SCLD-NASD)
SteelCloud, Inc.
Thomas Dunne
Chairman and
Chief Executive Officer
Interview conducted by:
Lynn Fosse
Senior Editor
CEOCFOinterviews.com
September 2003
CEO Analysis:
SteelCloud is a leading provider of software appliances to technology companies and
organizations that provide Internet security and network infrastructure solutions.
The company continues to build on its solid 16-year history, delivering security solutions
to major corporate and public sector enterprises, including some of the world's largest
software and IT companies. SteelCloud's comprehensive engineering, product
development, and support infrastructure provides a unique capability for rapidly
developing cost effective, high performance network appliances. SteelCloud and
Computer Associates International have developed a family of fully-integrated network
security appliances. The CA security solutions run on proprietary, hardened
SteelCloud appliances that have been streamlined and optimized for maximum application
performance in a distributed environment. The first set of appliances feature eTrust
Antivirus, the industry's most powerful, easy-to-own and cost-effective solution for
protecting enterprise environments from a full range of viruses and malicious code.
A family of intrusion detection system (IDS) appliances is being developed for eTrust IDS,
which monitors over 350 known attacks and exploits. eTrust Intrusion Detection
automatically mounts effective defenses against distributed denial-of-service and other
malicious attacks directed at customers' business. “The
network security market is one in which we have significant experience and insight,”
comments Mr. Thomas Dunne, Chairman and CEO of SteelCloud. “We knew that CA (Computer Associates International, Inc.) (NYSE: CA)
had some very good software products in the security arena, however, unlike many of their
competitors, none of CA’s security products were available as ready-to-deploy
appliances. As a result, CA had lost significant market share to competitors who
sell their software as fully integrated appliances that deliver immediate ROI to the end
user customer. We were very familiar with CA’s competition, and knew we could develop
an appliance that was superior to their competition. So we introduced CA to this
concept. They may very well have been thinking internally of a plan along those
lines. Anyway, we took the initiative, and formed a team (which includes Microsoft).
The result was that we launched our family of SteelCloud/CA co-branded security
appliances at the CA World Convention in Las Vegas. The reception by CA’s
worldwide group of channel partners was tremendous.” Explaining what
sets SteelCloud apart from its competition, Mr. Dunne states,
“CA’s security products run in a Windows environment,
which does not normally lend itself to being integrated into a turn-key appliance.
We worked with Microsoft and streamlined Windows by stripping out the unnecessary modules
and routines not required for the appliance. Besides tuning, we also hardened the
Windows Server operating system to make it virtually impenetrable. To support the
creation of the CA appliance, we developed our own hardened appliance environment called
SteelCloud Secure Console or SC2. This proprietary hardened and tuned software
environment overlays the Windows operating system and adds a web-based management
capability to the SteelCloud appliance. As a result, by using SC2, our
appliances operate at roughly twice the throughput of standard Windows Server in a much
more secure environment.” Discussing the opportunity for potential
investors, Mr. Dunne offers, “The
investment bankers we have been speaking to recently believe we deserve at least a five
times revenue in our category. We have to show that we can dramatically increase margins
in this company and earn money. We will probably put out twenty thousand servers for our
current fiscal year which ends in October… a lot of servers and a lot of work.
For that, we will probably have revenues north of thirty million dollars, with margins in
the mid twenty percent range. Next year, I can do the same amount of revenue with
less than three thousand appliances, and the margins will be in the forty plus percent
range. To make it simple, if we can do twenty million dollars in the appliance area,
we will realize upwards of ten million dollars in gross margin. The potential is there for
this company to have some explosive earnings. For our company to partner with the fourth
largest software company in the world and to build an appliance in the hottest market in
the world and take advantage of their worldwide sales channels is really exciting. I
think it is also exciting for our investors as the story gets out, and we start getting
orders, signing up resellers, and start selling through one of the largest distributor in
the country. This is an exciting time for our customers, employees and investors.”
In addition to its network security appliances, SteelCloud has a consulting services
organization that provides clients with a seamless extension of their own IT
organizations. SteelCloud consultants deliver a full range of expert technical
services, specializing in network analysis, security, design, troubleshooting and
implementation. Project consultants assist clients with IT related decisions and are
available to provide all the resources needed to manage and implement IT system designs,
modifications and upgrades. From service-desk personnel to programmers to network
administrators to most positions in between, SteelCloud provides a full spectrum of IT
outsourcing services. The company also develops custom computer systems designed to meet
the precise needs of their volume integration customers. Custom systems reduce
customer’s investments in logistics, integration capacity and support.
SteelCloud’s Configuration Management Program further enhances the customer’s
ROI by managing and controlling changes to software, hardware, firmware, documentation and
operating procedures throughout the system’s entire life cycle.
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SteelCloud,
Inc. (SCLD)
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