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High-Tech Shield
COMPANIES by Dave Szymanski | Tampa Bay Editor
I.D. Rank Security began offering a suite of software this year that protects clients from information theft.
Its suite of security software and computer devices went on the market this past summer. But the seeds of I.D. Rank Security, a Largo firm, were planted in 2002 at a trade show in Europe, when the world was still reeling from 9-11.
It was there that Peter Rung, now CEO of I.D. Rank, met David Boubion, his future business partner. The two tech executives would unite and form I.D. Rank Security, a software firm which helps companies and government protect information on computer networks.
The company officially began in 2006 in Boubion's home on Harbor Island. It then moved to the Star Tech Center, an incubator in Largo.
There are some large players and lots of small- and medium-sized companies in the security software industry. In the last eight to nine years, it has become a hotter segment in software manufacturing because of the growth of computer and wireless networks, online banking and terrorism.
"It's a growing industry, but there's definitely a lot of companies in the space," says Chris Whalen, marketing manager for Fortress Technologies, a software and hardware wireless application security firm in Oldsmar.
What sets I.D. Rank apart: Size, Rung says. At 15 people, I.D. Rank is small, nimble enough to change directions for clients more quickly than larger firms.
Rung, 51, a Chicago native, had worked for years in the IT, hardware and software industries on the technical side. He then became a management consultant in 1995. After success with a number of companies, he began thinking about launching one of his own.
Meanwhile, Boubion was also working in the tech world, and eventually worked in Sweden, one of the leading countries in developing encryption, or security technology.
Assessing demand
The key management question for Rung and Boubion: Understanding what people were going to buy.
Employee theft of data is the largest kind of corporate information espionage today. The ability for employees and contractors to attach devices on desktop and laptop computers such as mp3 players, USBs, PDAs and smart phones, have made it important for corporate IT and security to manage and control their use. No longer are written policies enough in providing protection and security within a company's network.
After inspecting the global security market, Rung and Boubion assembled a list of potential products, including one to protect company telephone calls made through the Internet. They spent a year doing designs and prototypes and getting patents. This past summer, they launched the suite.
So far, about 80% of sales are corporate, the remainder to consumers.
Security comes with a cost. The price of the I.D. Rank suite depends on the number of users, but can climb well above $100,000. However, security suites with other companies can climb 10 times higher.
"It's not difficult to get to $1 million, with 5,000 seats," Rung says. Some network security devices at other vendors can be $150,000 each.
Its customers, which include the U.S. Department of Defense, are almost all outside of Florida.
Rung's vision this first year of business: Build sales with government and financial services clients and establish strategic partnerships in two to three continents for business sales.
In five years, Rung expects outside investors will get an equity stake that will grow I.D. Rank or they will buy part or all of the company.
"The age of the IPO has left us," he says. "All business newspapers are writing about private equity."
Before then, the staff size should grow, especially in sales. Most of consumer sales are through the Web site.
Rung compared his talks at software or security trade shows to similar presentations by Apple Computer founders Steve Jobs and Steve Wozniak who were not well known at first, but attracted attention quickly because of their product.
"Like Woz and Jobs, we were in the obscure booth in the back of the trade show," Rung says. "We've had more than one lieutenant colonel come up to us and say, 'We look for companies like you.'"
The management lesson: It doesn't matter if you're a large company. You have customers and you better understand what they need, Rung says.
What sets you apart?
I.D. Rank Security CEO Peter Rung says his company sets itself apart by offering flexibility and quick turnaround work for clients, citing Harvard Business School Professor Clayton Christensen.
Christensen wrote that in many cases, small companies are able to innovate more quickly than big firms.
But the issue is not only innovation, it is being able to be recognized in the market. "We have some very pointed solutions to address some real issues," Rung says. "The challenge is getting in front of corporations and government folks ready to buy the solution."
Smaller companies challenge larger ones. Then they are challenged.
"Microsoft out-innovated IBM," Rung says. "Microsoft now has become like IBM and Apple is out-innovating Microsoft."
REVIEW SUMMARY
Company: I.D. Rank Security in Largo
Industry: Software manufacturing
Key: Help business and government protect information.
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