PODCAST: VirtualArmour Founder Chris Blisard on Competing in the Cyber Security Sector
VirtualArmour International Inc. (CNSX:VAI) (OTCQB:VTLR) (FRA:3V3) is an enterprise-class IT protection management system. Founder Chris Blisard talks to James about their in-depth services and why their clients weren’t affected by the Wanna Cry and Petya cyber attacks.
James West: Chris, thanks for joining us today.
Chris Blisard: Thank you for having me.
James West: Chris, what is it that differentiates VirtualArmour from all the other enterprise-class IT protection management systems out there?
Chris Blisard: That’s a great question. The landscape is pretty broad when it comes to managed security services, and a lot of what we would consider our competition offers a very vanilla-like solution to their customers. So while they can do some managing and monitoring, they really don’t get in-depth with each of the products that are sitting within that customer’s network.
So when you look at us, there’s a couple of things that really position us differently. First and foremost is our unparalleled response service. Our SLA in our business is 15 minutes. No one else meets that SLA within the managed security services business.
James West: Sorry, SLA?
Chris Blisard: Service Level Agreement.
James West: Okay.
Chris Blisard: And no one else meets that requirement, and we do that 24 by 7 by 365. We also do one-on-one client management. So what I mean by that is, each one of our customers has a debriefing session once a week with a set engineer and a set sales or technician support person on our side, and the purpose of those calls is to go through everything that happened the week before within our security service for the customer, and also talk about things that they’re seeing being an issue, where we can help be more responsive or broaden our offering to them, etcetera.
What that ends up doing is, it really allows our customers to feel like we are clearly an extension of their business, because they are one-on-one with those people each week, and we don’t change those people out. So when one of our engineers is assigned to that account, that is their responsibility.
James West: Did any of your clients, or have any of the clients in the last year, experienced any of the major outages that other large corporations suffered as a result of the large-scale virus attacks that we’ve seen in the news lately?
Chris Blisard: They have not. Our customers were not impacted by Wanna Cry or Petya or some of these other cyber attacks that were out there. We obviously are very proactive with our customers; we cross, we do the monitoring as well as the managing, we are on top of a lot of what potentially could be an outage for them.
But, luckily enough, none of our customers were hurt by those outbreaks.
James West: Sure. Okay, is it safe to say that the fact that you were able to protect your customers at the enterprise level – is that pretty much representative of the opportunity for Virtual Armour going forward right now?
Chris Blisard: It absolutely is. 75 percent of our business, or our company right now, are engineers, ranging from professional services to managed services engineers. So when you look at that from an overall company portfolio, we are clearly set up to support very high end, very complicated networks.
For us, that’s the main focus of our business, and that’s where we focus on supporting our customers. The other thing that’s interesting is, over the past several years, because so many of these attacks have been happening and so many companies have been hurt by those attacks, a lot of the mandates around security service work within an organization is to have it outsourced. Companies are finding that they can’t hire enough or hire quick enough into their security services organization. They can’t keep them up to speed, and quite honestly, it becomes a vulnerability for them.
By being able to outsource that solution to people who are experts in the space and focused on it, like Virtual Armour, it gives them a broader capability by outsourcing. And also, if the outsource provider doesn’t do their job, they can unplug that outsource provider and bring in a new one, which makes it a much more agile environment for basically their cyber security posture.
James West: Sure. So what is the risk, then, to Virtual Armour and to your clients that the pace of evolution of these new threats exceeds your ability to respond to them? Is that a serious problem?
Chris Blisard: When you look at how VirtualArmour addresses their customer base, we do it in a fashion where we use best-of-breed solutions and then have them as part of our managed security service. So we are not a one-stop-shop as far as, when you’re looking for the solution itself. So whether it’s SEAM, or threat prevention, or remediation or research, we are partnered with a number of solution providers that are considered the best of breed in those spaces. So combining that with our offering and how we manage all of those solutions in harmony to create the right ecosystem for our customers, we are very much on-pace at any given point in time with whatever threat is out there.
James West: That’s great! Tell me, how much of the company’s shares are controlled by management, founders, insiders, etcetera?
Chris Blisard: Roughly 60 percent.
James West: Oh, okay, so very much a company-owned operation?
Chris Blisard: It is. We’re very proud of our company, and we’ve got a great team of senior executives that are all part of that plan as well as myself and Todd Kannegieter are the original founders of the business.
James West: Great. What’s the financial condition of the company generally, and what do you see happening for the next 4 to 12 quarters looking like in terms of EBITDA and EPS growth?
Chris Blisard: So, the company continues to grow at a very nice pace. We’re on track to do roughly 13 million this year; we’ll move to 17 million or close to 18 million in 2018, we’re going to reach upwards of the 20s in ’19. Throughout that, we’re EBITDA positive, and our EBIT numbers continue to grow.
As far as what we want to do as a business, obviously we have a, being in Colorado and have a number of large, industrious states around us, we want to have a good regional presence with our customers locally, and then we will continue to grow, not only there, but outside of the US, in areas like Europe and Canada.
James West: Wow, great. So who are some of your biggest clients?
Chris Blisard: We have some fantastic clients. In fact, FMC and JBTC, two companies that deal within oil and gas and other systems, are some of our largest customers, and also our oldest customers. So those customers have been with us for almost nine years now. They are multi-location; from a network perspective, we service between the two of them, almost 50 countries.
James West: Wow. Huh. And then that begs the question: who are some of your biggest competitors?
Chris Blisard: You know, in the world of managed security services today, you’re seeing some consolidations in the space. There was a company that was known as Dell SecureWorks that has been spun out from Dell called SecureWorks; they are a competitor for us. We run into them regularly. However, I believe that the way we deliver our services and some of the things we’ve talked about, including our proprietary portal, which is CloudCaster – the type of things that we can deliver to our customer really sets us apart from, like I mentioned, a more vanilla offering.
There’s also companies like Optiv, which was a buyout by an equity firm here in the States. They took FishNet and Accuvant and put them together, Accuvant being the hardware seller, FishNet being the managed service provider, and again, that would be competition for us. But, we don’t find that, while their names are out there and we do hit against them, because of the way we position our solution and how proprietary it is for our customers, we really don’t have the – we don’t lose very many opportunities.
James West: Okay. So what is your plan to accelerate market share acquisition in the next 12 to 36 months?
Chris Blisard: So, over the next 12 to 36 months, obviously we’re going to continue to expand our sales organization; as I said, we’re 75 percent engineers, and for good reason, for the type of customers that we serve, but now we really want to start to focus on the broadening of our sales organization, not only as direct sales representatives of our service, but also into some of the channels that can support us through this type of solution.
We want to obviously continue to focus on driving penetration in our own backyard, being the Colorado West area, and continue to leverage our presence in the UK to capitalize in the European market. Our stock in Europe is fairly substantial; Andrew Douthwaite, who is our VP of managed security services, resides there, and we have a great footprint right outside of London, so we want to continue to grow that as well.
We’re going to continue to work with our partners to create additional opportunities and obviously, maintaining our service superiority, which basically differentiates us from everybody and also gives us tremendous amount of referrals.
Lastly, we do invest in R&D, as we spoke a little bit about CloudCaster, which is our proprietary portal, and the purpose around that portal, I believe, is very important – is that that portal has been built to not only service the IT side of the organization that we are engaged with, but also the entire C suite. We are seeing more and more today, with cybersecurity threats, that it’s just as important for the CEO or Board member to understand how they’re protected, as it is for their Chief Security Officer or their CTO.
We continue to invest in that platform, making sure that it brings everything to our customers in a single pane of glass, and also looking at other opportunities around that platform to drive it into an app capability, so that whoever’s in that organization can use that app to get alerts and other things like that.
James West: Sure. Okay, Chris. Finally, what is the size of the marketplace globally? Is this a billion-dollar marketplace?
Chris Blisard: It’s a multi-billion-dollar marketplace, and quite honestly, I think they have global security spending is predicted to go over $1 trillion, of which we’re a large part. So I would say the cybersecurity market is probably $3 billion-$5 billion right now, but it will continue to grow rapidly.
James West: That’s great, Chris. Let’s leave it there for now. I’m going to follow with interest, and thank you so much for your time today.
Chris Blisard: James, thanks for your time. I very much appreciate it.
James West: Bye for now.
Chris Blisard: Take care.
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