Cyber security is a hot topic right now, and it’s in this environment that archTIS (ASX:AR9) pursued a listing.
We sat down with CEO Daniel Lai to talk through the archTIS journey so far, and what’s in the works for the next few months.
SI: So I just want to begin by you just giving me a bit of introduction yourself and perhaps a bit of background into your expertise in the sector.
Daniel: Well my name is Daniel Lai and I’m the CEO of archTIS, and I’ve been in the industry now for just over 20 years in the cybersecurity industry — working in both the public sector and the private sector for government and multinationals.
SI: So just give me the elevator pitch for archTIS — so what does the company do or make, and I guess what problem does it solve for your customers?
Daniel: Well, archTIS’ mission is to unlock the potential of an information driven world by enabling trust. acrhTIS stands for ‘Architected Trusted Information Sharing’, and in a contested world where you have organised crime and cyber crime and foreign actors, and particularly with the number of incidents that we’ve had in the news recently, trust becomes a very high commodity.
So we’re really about sharing information and providing the trust behind that so that people feel free and uninhibited to share their information securely.
SI: So what does that look like from a product point of view — what specifically does archTIS do?
Daniel: Well, specifically we do that through developing secure content and collaboration platforms with the highest level of security standards being met in the security model that is embedded in that.
SI: Right, that all sounds really great. So what would you say your company’s competitive advantage?
Daniel: Well that’s a great question and it’s very difficult market to know where to put your money into our cybersecurity because it’s an enigma to most investors.
So I’ve had this question a number of times an easy way to answer that from our perspective of ‘how do we have trust in the archTIS as a cybersecurity investment?’ is really that you know our product has been accredited by not just the Australian Department of Defence but by the National Security Agency in the US to hold and host up to top secret US information and that’s very rare.
And it’s a very hard core certification to get
SI: Especially for an Australian company or a foreign company I would imagine…
Daniel: Particularly so.
We were the first company to get that accreditation but from both the Australian Signals Directorate and the National Security Agency in the US to do that. But there’s more to that issue as well. Obviously it’s about also what is the credential coming from such a high profile client support.
But there’s also other areas that you need to look at and that’s what is the applicability of your solution to the broader market.
And for us that’s content collaboration market in a digital era is massive, so it can be transferred to multiple different industries, and particularly those industries which service government such as the defence industry and the legal industry and how they have to meet also the same compliance requirements for government.
SI: So one of the things that kind of stands out to me when I’m looking at archTIS when I’m looking at the slide decks and stuff like that is that there are a lot of heavy hitters on the board. Just wanted if you could take me to through some of those heavy hitters and what they bring to the company.
Daniel: We have a great board and it’s a very high profile board. It obviously starts with our chair Stephen Smith who’s the former Minister of Defence and the former Minister of Department of Foreign Affairs and Trade.
So Stephen understands the importance of national security and he’s been in that space and he also understands government and obviously has a lot of relationships and contacts in government, and he’s well respected on both sides of politics. So that’s very important to us. And his governance is second to none.
But we also have a fantastic commercial acumen there with Leanne Graham who’s the former head of the Global Strategy sale strategies for Xero and was part of the Xero float. Obviously Xero accounting software is a software as a service model and an extremely successful one. So we’ve put that commercial experience and input from the board as well. We have very strong financial support there with Wayne Zekulich who’s the current head of the Deutsche Bank in Western Australia.
And from a technical perspective we have Bruce Talbot who is the founder of archTIS and has worked for ASD, Australian Federal Police, Air Services and has a background in engineering as well. So we’ve got a very diverse board.
They’re very hands-on and they’re very engaged in what we do and that that experience is certainly a great foundation for the company moving forward, particularly since it’s listed.
SI: It’s really interesting you say they’re quite active and hands-on. I guess the experience some companies have with their board as they turn up the meetings six times a year and collect a pay cheque, but that isn’t the case with archTIS?
Daniel: No, they’re very committed to the mission of turning this company into a global force in terms of secure content collaboration, and of course with that breadth of experience we feel very secure in the fact that such high profile people believe in the product and that’s a great message to investors
SI: So talk me through the pre-listed life of archTIS. I believe it’s been around for a fair while before the company decided to list back in 2018…
Daniel: archTIS was established in 2006 after the 9/11 incident in New York. The US Senate commission report that looked into that found that there was a number of agencies, law enforcement intelligence border protection agencies, that had a lot of information that if they had connected the dots and shared that information they could have prevented or mitigated or minimised the impact of that attack.
So really that problem has, with the war on terror, exacerbated a bit it also applied to the financial markets, as well as global integration of supply chain management, energy markets…so the more we can share information and particularly sensitive and valuable information the better and more value we can get back.
So we’ve been essentially doing this in the highest areas of security with the Department of Defence for 12 years and the product is now in its third generation in production with the Department of Defence as I mentioned holding US and Australian highly classified information.
We saw the market opportunity more broadly in not just government but in an industry come to fruition and we decided commercialise that product.
So the journey really has been one of getting to the point where the market has been ready to adopt these type of solutions and understood the value proposition that we have. And certainly that’s time is now.
That twelve years experiences a massive competitive advantage where other products are just starting to see the opportunity. Now we’ve got that pedigree.
SI: Why did archTIS seek an ASX listing and how has the experience been so far?
Daniel: The listing was essential for us to raise the capital to complete the commercial product — as you’ll be aware if you are a consulting company which was our humble beginnings, you have a very different capital structure whether you’re a systems integration company and whether or not you’re a product company.
We see it very important to become a product company. We see that’s where the greatest wealth creation for our shareholders.
And we think that that’s the most important place to be at this time in the market and particularly with cloud platforms and software as a service and the multiplying effect that can have on your share price and the wealth creation for your shareholders.
SI: So I just want to take this in a different direction now, of what sort of companies within your patch or sector do you most admire? What is it about either execution or strategy that you’ve tried to replicate within archTIS?
Daniel: Well look it’s an interesting question and in our sector particularly, the cyber security sector, there’s many areas and there’s products out there that look at threat analysis and protection.
There are products out there that look at it you know encryption — we’re neither of those. We are actually an information security company and we specialise in providing access to that information.
Our number one differentiator is that we provide contextual access to information, but there are a number of companies in the cyber security area that we look up to.
Penten here in Canberra ,which is just one Telstra Business Awards, again a local Canberra company which is setting on the international stage alight with its products and demonstrating that Australia has a cyber security industry that’s second to none.
And in that area as well as Dtex, an Adelaide company, with Mohan Koo, and finally Sapien as well over in Western Australia which came out of Edith Cowan University.
What we admire about all of these folks is that they’re building an industry and world stage presence with world class leading cyber security, and demonstrates that Australia is second to none in this area.
And of course we all work in complementary areas and there’s a great camaraderie in the industry.So I admire those guys for you know, and I definitely understand difficulties in which they’re growing their companies in the Australian marketplace and I’m very happy to see them becoming successful.
SI: So it’s sort of a ‘lifting tide lifts all boats’ sort of situation?
Daniel: It is, and it’s a very exciting time in the Australian cyber security industry and market — and I think that that’s what investors need to really be aware of. This sector is growing rapidly and it’s definitely an export market.
SI: Perhaps if we could look at maybe a company sort of completely outside of the cyber security sector. What companies outside of your sector do you admire and what have you tried to apply to archTIS?
Daniel: Well I mean there’s obviously the well-known stories such as Apple but then there’s the other side of that which is Atlassian, which is an Australian company as well, and the bravado which in which they took that market place and that inspires us again being an Australian company — but also Xero.
I think the both of their models and the way that they penetrated the market and achieved growth has been something that we can learn from.
And they’re accessible, for us to try to get into those companies and extract that knowledge out and apply to our own business models and how we go forward in the marketplace.
So I think I think the companies that I definitely admire — Atlassian and Xero.
SI: So just to bottom-line this conversation, what challenges is archTIS facing 2019 and perhaps from a newsflow perspective, what can investors expect to see in the next few months from archTIS?
Daniel: Well, we’re progressing our beta trial.
archTIS so has really been focused on two things since the listing:
The first one is finalising the product development and the release of a commercial platform to the market for trusted information sharing. We’ve had great success in our beta program and that’s going well, and we’re in the final stages now of going through a certification process for protected information which is going to expand the client base for our product and an entry into that government market.
So it’s that’s the first area that we’re very focused on.
The second area is obviously building and executing our go to market strategy. And we’ve been very active in establishing a network of important strategic partners such as Oracle, Axiomatics, Vault, Deloitte, DXC, and this partner network have already commenced identifying opportunities both locally and internationally.
That’s even before the product’s been launched.
So we’re very excited by the demand that we see in the marketplace and I think that there’s obviously going to be a number of announcements around that in the future.
And so I think we’ve got a very exciting year ahead of us, and it’s going to be most important to manage growth and have the infrastructure in place to meet the demand that we think and expect in the marketplace for our products.
SI: Well that all sounds really exciting. I can’t wait to see the side of that sort of journey unfold in the next few months. Thanks for joining me Daniel.
Daniel: Thanks very much James, it’s a pleasure.
This content is produced by Star Investing in commercial partnership with archTIS. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
Don’t miss a thing, subscribe now