SafeNet Acquires Authentication Vendor Cryptocard

Baltimore-based data protection vendor SafeNet, today said that is has acquired Cryptocard, a privately held provider of authentication solutions.

Established in 1989 with dual headquarters in Canada and the UK, Cryptocard offers a wide range of phone, software, SMS and physical tokens for authentication, as well as its “grIDsure” method that allows an end-user to generate a one-time password without the need for hardware tokens or software applications.

Cryptocard claims its customers are not vulnerable to an attack such as the breach that was reported by RSA in March 2011, which forced millions of tokens to be replaced and putting the concept of hardware token seed data into the spotlight. Because Cryptocard customers can enter the seed data into the tokens themselves, Cryptocard does not have a copy of the seed data, leaving no copy of the seed data vulnerable to compromise. SafeNet has offered a similar model as part of its offerings as well.

Additionally, Cryptocard tokens allow customers to choose the length and complexity of both the passcode generated by the token and the user’s PIN, allowing them to control the level of security they need.

Through the acquisition, SafeNet says it will enhance its authentication offerings, and that the company will combine its Trusted Authentication Solutions with Cryptocard’s Blackshield Cloud platform, giving SafeNet’s customers access to on-premise and “as-a-service” solutions.

“As data continues to proliferate and move beyond traditional perimeters, both enterprise and government customers are demanding solutions that protect and control data and identities across networks, mobile devices and to and from the cloud,” said Chris Fedde, President and Chief Executive Officer of SafeNet.

SafeNet says the acquisition will also expand its addressable market opportunity, and strongly position the company to capitalize on the fast-growing Auth-as-a-Service and cloud services markets.

According to Gartner Inc.’s January 2012 “Magic Quadrant for User Authentication” report, Ant Allan, Vice President, stated, “The user authentication market is expected to grow by approximately 30 percent in the upcoming year. Gartner predicts that, by 2017, more than 50 percent of enterprises will choose cloud-based services as the delivery option for new or refreshed user authentication implementations, up from less than 10% today. However, it is likely that on-premise solutions will persist, especially in more risk averse enterprises that want to retain control of identity administration, credentialing and verification.”

Financial terms of the acquisition were not disclosed.