Archive for Route1

Hey IT Nerd! Why Haven’t You Written About Route1 Lately?

Posted in Commentary with tags on February 15, 2013 by itnerd

For those of you who are recent readers to this blog, Route1 is a company based in Toronto Canada that makes digital security and identity management products and has a customer list that includes the Department of Homeland Security and the Dutch Ministry of Foreign Affairs. Their flagship product is the MobiKEY which lets you securely access your PC from any where. I even had one for a while when I was still making the transition form working for someone else to working for myself and I loved using it.

So, back to your question. I have a soft spot for Canadian companies and I’ve written about Route1 extensively in the past. But the reason why I  haven’t written about Route1 lately is largely because they haven’t done anything of note. For what it’s worth, I’ve said this in the past about the company:

My feeling is that it needs to hit a home run of some sort to really put it on a course of success. You would think that given the client list that it has, that we shouldn’t be talking about this and we’d be saying that it is the next tech giant from Canada. Clearly that isn’t the case.

I still believe that they are a “home run” away from success. But the closest thing to big news is a press release that notes a $200,000 judgement in a defamation lawsuit brought against a user of the investor board Stockhouse.com (though from recent checks of that board, the user in question who goes by the pseudonym of “simonquinn” hasn’t been silenced which makes me wonder how effective this judgement was). Combined with their stock being at $0.04 as I type this, it doesn’t give me a reason to write about this company.

Now perhaps I’m looking at this wrong and that success is just around the corner. Their latest version of the MobiKEY works on the Mac (albeit as a client to allow you to access your PC at work remotely), and that will help to broaden their appeal to more users. Not to mention the company has been somewhat transparent about their sales pipeline which will help to keep the the noise down and allow them to focus on what they need to do. But having said all of that, all I know is the longer they go without that home run, the less likely they’ll be part of my Google Alerts which in turn means that I won’t be writing about them. That’s a shame as I really think their technology is top shelf and there’s a need for it. But great technology alone doesn’t make you a successful company by default. You have to be able to hit the home run. Harsh, but true.

If they put one in the seats, you can bet that I’ll be writing about it here. If they don’t, you now know why I won’t be writing about them.

Route1 Issues Open Letter To MobiKEY Users….. Stock Nosedives….. Is There A Connection?

Posted in Commentary with tags on May 15, 2012 by itnerd

Something really weird happened today to Canadian tech company Route1 whom I have written about previously. At 8AM today, this press release from CEO Tony Busseri appeared on their website and on the wires. I have reprinted it below in it’s entirety:

Dear MobiKEY Users,

Since joining Route1, I have focused our team’s efforts on executing our business plan. As a result, Route1 is on a path of accelerated growth and is working with corner stone accounts such as the U.S. Navy and the U.S. Department of Homeland Security. In addition, as I mentioned in the most recent earnings release, we are building a significant base of potential business and developing new applications that we believe will add to profitability in the future.

Unfortunately, in the modern age of the Internet, online publications allow for the rapid and broad dissemination of information on companies whether the information is factual or misleading. Last week, I was quoted in an AOL Defense article online, where Route1’s technology was explained. In light of the recent activity and concerns, I believe it is important to set the record straight about Route1 regarding our technology and exactly how our security and identity management products and services provide the highest level of remote access security on the market today.

What has been misrepresented goes to the heart of our technology. Route1’s technology is patented (U.S. Patents 7,739,726 and 7,814,216) and is proven to “let federal workers telecommute securely using ordinary computers and mobile devices, not just specially lobotomized ones”. A key part of a Route1 delivered secure remote access session is that the enterprise’s data is not allowed to exit the enterprise’s network, and thus advance beyond the confines of the enterprise’s firewall(s) which are built to protect the data. We call that ‘protecting the fortress’.

Whether or not a teleworker is using a personal device or an enterprise computer makes absolutely no difference to us. With Route1’s solution, what is essentially happening is the host computer is sending encrypted screen shots to the mobile device; be it laptop, tablet, or other similar devices, and the mobile device or guest computer keystrokes and mouse movements are being sent encrypted back to the host computer to be effected on the host computer. As a direct result of Route1’s solution architecture, data on the mobile device can NOT be mixed with the enterprise’s data.

The final result being that it is impossible for a hacker to piggy-back a Route1 connection or penetrate an enterprise’s firewall during a Route1 data session. The data is completely secure.

That is the Route1 difference. We always put security first by protecting the fortress.

Sincerely,

Tony Busseri

Now it made we wonder what article he was talking about. A quick Google search found this article. It talks about Route1 and their technology and quotes Busseri. It does have this quote that got my attention:

Ultimately, though, as is often the case in computing and security more generally, the biggest problem is not the technology but the people using it. When you read stories that “someone had left their damn laptop on the train, sorry, that’s not a shortcoming of the system, that’s a shortcoming of the person,” Wilsker said. “These people are not adequately trained,” he went on. “The fear of God has to be put into people.”

That’s true. The weak point when it comes to security is the user because some users do dumb things. But that’s a given. There is also a note at the bottom of the article that indicates that the article was revised to clarify the security features of the Route1 software.

Although there is a bit of a cynical tone to the article, there’s nothing here that should have caused this to happen to the stock price:

That’s one hell of a dive. Now the stock has floated as low as $0.03 a share in late 2008 and at the moment it appears to be heading back there again. But the question is, why the dive? Is it this article followed by the press release from today which has spooked investors? Is it something else such as the overall turmoil in the markets? Perhaps investors are getting out as they were disappointed with Route1’s recent results? I don’t know for sure. I’m a IT nerd, not a stock analyst. Perhaps someone who does watch stocks for a living can chime in and comment on what happened. However I don’t need a economics degree to see that this company is in deep trouble at the moment. At this point, I don’t know what can save them. And that’s too bad for them as they seemed to have a bright future.

Route1 Reports Results…. They Disappoint

Posted in Commentary with tags on April 28, 2012 by itnerd

Last week I touched on Canadian company Route1 and their struggles. On Thursday afternoon after the close of the market they reported their FY2011 results and they were less than stellar. Here’s the highlights:

  • Revenue increased to $5.5 million from $5.4 million in 2010
  • Gross profit for 2011 dropped to $4.5 million from $4.7 million in 2010
  • EBITDA for 2011 was a loss of $1.5 million
  • Subscriptions to their TruOffice product were basically stagnant at 15903 subscribers versus 15654 in 2010 according to the MD&A document [Warning: PDF]

There was one factor that worked against the company:

The Company’s profitability for 2011 was significantly and negatively affected by its auditors’ advice that approximately $1.5 million for the costs of pursuing an arbitration award be included in Route1’s results for the 2011 fiscal year, while the proceeds from payment of the award, amounting to approximately $3.4 million, could not be recognized until fiscal 2012. Interest income on the award in the amount of $583,741 is included in the Company’s 2011 results.

The award that they are talking about is this one. Route1 had a bit of a falling out with Qwest Government Services. Quest was supposed to help them break into the US Government market, but things clearly didn’t go well on that front.

The market reacted negatively to this news. The stock dropped to 7 cents from 8 cents at the start of Friday. Now the company did say that good things are coming. Here’s what CEO Tony Busseri had to say:

“Based on our progress to date, we remain convinced our strategy of focusing our marketing efforts on the government and military sectors, particularly in the United States, is best for Route1 in both the short and long-term,” said Mr. Busseri. “While it is clearly taking longer than we had hoped to reach final purchase agreements with the many organizations in those sectors, we remain convinced that their size and security requirements mean their potential for Route1’s revenues and profitability is significant in the long run.”

Here’s the problem. Until a big deal happens, nobody will take this company seriously. That’s a shame because I believe the remote access technology that they offer is first rate. But great technology doesn’t make a great company. What makes a great company is the ability to take that technology, get it into the marketplace and make the value proposition that the technology offers so attractive that it becomes a must have. That doesn’t seem to be happening with Route1. But to be fair, the company does plan on giving regular updates as to their business development pipeline. That will help with their credibility. Of course I need to mention that if things continue the way they are right now and they don’t get the big breakthrough sale, they’ll be the next RIM who is another company with great technology that they can’t sell.

I’m going to keep an eye on this company as I feel that a shake up is coming within the next quarter or two if things don’t improve. When that happens, it might get ugly given the shareholder sentiment in places like Stockhouse.

Route1: The End Or The End Of The Beginning?

Posted in Commentary with tags on April 19, 2012 by itnerd

A company I’ve written about on several occasions and have even used their products at one point is Toronto based Route1. Their flagship product is called the MobiKEY which is a USB token that allows you to have secure remote access from any Windows based PC to a Windows based PC that has their host software installed. It’s cutting edge and gotten some traction in the marketplace with the Department Of Homeland Security being one of their early enterprise customers. Other US Government departments noticed and signed on too. Not to mention the Dutch Government. You’d think that would be a license to print money. Too bad it hasn’t worked out that way as I type this.

You might recall from this post that the Founder and CEO K. Andrew White got fired. That triggered a proxy fight which ended in him getting his job back, only to be replaced again. The new CEO, Tony Busseri has had a uphill battle ever since. Busseri promised investors in November 2010 that they would see that the company would grow from just under the 16,000 MobiKEY subscribers they had at the time to north of 100,000 MobiKEY subscribers. A year later, they were still just under 16,000 subscribers. So that clearly didn’t go as planned. As it stands at the moment, the stock which had been as high as $0.28 CDN a share in Oct. 2010 is currently $0.075 CDN a share. Though I will note that the company is in the process of buying back up to 10% of the common shares that are out there to boost the stock value.

I’m guessing that Mr. Busseri is feeling the heat as he said this on his Twitter account reecently. I’ve re-posted the Tweets without editing:

To those that follow me. I hear and feel your frustration re the SP and lack of a big order.

We continue to beleive that the depth and quality of our pipeline is real and growing. We continue to beleive we are very close (con’t)

(con’t) Time will ultimately prove if our technology is going to receive larger acceptance than it currently has.

We are busting our tails and I continue to strongly beleive in our plan and team.

Lastly, I know how we’re being judged. I invite you to consider all that has happened in 25 mos and all that could in the next 25 mos.

I need to learn how to spell BELIEVE 🙂

This might have something to do with unhappy investors on a website called Stockhouse. If you browse this site, there are a bunch of unhappy people there who want blood. Now, this likely isn’t the total view of how Route1 investors feel as a lot of what is on there can be considered to be vitriol. There likely are other voices such as institutional investors who are making noise as well. But in either case it’s likely not good for the company to have to deal with this noise.

So, the question is this. Is this the end of Route1, or is the best yet to come from this company? My feeling is that it needs to hit a home run of some sort to really put it on a course of success. You would think that given the client list that it has, that we shouldn’t be talking about this and we’d be saying that it is the next tech giant from Canada. Clearly that isn’t the case. I suspect the answer will come when they release their Q4-2011 financials. According to a press release from today, that should happen next Thursday. That will give investors a better idea if this is the end for Route1, of if it’s the end of the beginning.

Route1 Picks Up $25 Million Dollar Deal

Posted in Commentary with tags on April 30, 2011 by itnerd

A Canadian company I’ve had my eye on for some time is Route1. I’ve used their product until very recently, and they’ve picked up a deal with the US Department Of Homeland Security as well as the Dutch Government, both of which are no small feats. Yesterday Route1 announced that they did it again. This time with the US Fish And Wildlife Service:

FWS requires removable, secure computing devices and services that will allow users to connect to their workstation desktops and applicable network resources from any internet-enabled, Windows-based computer. FWS’ objective is to acquire the ability to remotely access U.S. Government systems and information in a secure environment, and to enable and promote the ability to telework.

FWS has entered into a blanket purchase agreement with Route1 for delivery of up to 10,000 users, with the longer-term goal of adding users from other components of the United States Department of the Interior. The term of the blanket purchase agreement is five years from the date of the award, with the total value of the agreement valued at US$25 million.

This is good news for a company that has gone through some serious turmoil that resulted in a change in CEO as well as the board of directors and only very recently showed a profit. That can’t be good for the morale of their employees who are going to be critical to them executing on this deal. All you have to do is look at Yahoo as an example of what happens to a company that is under a fair amount of turmoil. Their key employees leave or are poached by other companies. That’s something that is hard to recover from. Seeing as Route1 is desperately close to hitting the big time, one has to hope that this hasn’t happened to them.

In any case we’ll see if this is the turning point for this company. Otherwise Route1 will be one of those companies that didn’t quite deliver on their potential.

Route1 Scores Major Deal To Sell To The Dutch Government

Posted in Commentary with tags on August 31, 2009 by itnerd

First the Americans, and now the Dutch. Canadian remote access provider Route1 seems to be on a roll as they’ve secured a major deal with the Dutch Government:

Route1 Inc., (TSX-V:ROI) a security and identity-based services company, today announced that the Government of the Netherlands Ministry Foreign Affairs has increased its deployment of Route1’s TruOFFICE™ subscription-based service and MobiKEY® devices to enable secure interactions with their digital resources from anywhere, at any time. The Route1 solution will be deployed to both personnel at headquarters in The Hague, Netherlands, as well as personnel located at Dutch Embassies abroad.

That’s interesting, but the big news is the number of users who will get to use their MobiKEY product:

“Route1’s identity-based solutions allow security-conscious organizations like the Dutch Ministry of Foreign Affairs to easily and quickly deliver services to geographically dispersed personnel with a high level of security,” said Dean Peloso, Interim President and CEO, Route1 Inc. “This order represents an increase in the Ministry’s deployment by another 2000 users. We look forward to growing our relationship with the Government of the Netherlands as other departments look to follow the Ministry of Foreign Affairs to meet their needs for highly secure identity-based access solutions.”

Two thousand users is nothing to sneeze at and should provide a significant revenue increase to this company. And some much needed good news for a company that has had some negative press lately. Clearly their boardroom battle hasn’t gotten in the way of closing deals. Hopefully the trend continues.

It Was The Best Of Times, The Worst Of Times, And The Best Of Times At Route1

Posted in Commentary with tags on July 27, 2009 by itnerd

There seems to be a lot going on at Route1. I’ve written about this company on a few occasions, and I use their product in my daily existence as it’s a good product. I’ve also been expecting a big breakthrough at some point this year since they scored a major deal with the US Department Of Homeland Security. Last week seemed to be the beginning as they released their second quarter statements last week and it showed an eight fold increase in revenue. But later in the day some storm clouds appeared to dampen things. First the news hit the wires that the founder and CEO of Route1, K. Andrew White was looking to replace the board of directors at the annual general meeting of the company later this year. One of the board members that he wants is former Ontario Premier Mike Harris who had this to say:

“I believe Route1 has turned a major corner and is now poised for significant growth,” stated Michael Harris. “I am excited to serve on a Board that works with a management team led by Andrew White. He has built a business in an area of world leading technology, this is exactly the kind of company that Ontario and Canada need.”

Why does he want to replace the board? I’ll let him explain:

Mr. White approached Ian Currie, the current Chair of the Board of the Company, in May 2009 about making significant changes to the current Board of Directors to better reflect the needs of the Company as it moves into 2010 and beyond. Specifically, Mr. White is of the strong belief that the current Board is not engaged in supporting management in the furtherance of Route1’s business objectives. To date, the Board has resisted making any changes to its composition.

And:

“Route1 is currently handicapped by a disinterested Board of Directors that has provided minimal support to the initiatives of management. I am disappointed that the reaction of the board to my proposed changes is to seek to entrench themselves at the expense of the company,” Mr. White said. “As shareholders we expect and deserve to have a Board of Directors comprised of engaged business leaders who have personally delivered transformative value to shareholders and stakeholders. We want individuals to join our board who want to work with management to deliver on the exceptional shareholder value creation opportunity that is real and present.”

Later in the day came a press release that Mr. White had been removed from his job as CEO of the company and he had been replaced by Dean Peloso who is a member of the board of directors. The company then issued another press release two days later with their side of the story. This sent the stock down from $0.10 a share on July 21st to as low as $0.065 a share at one point during the day July 24th. Not good if you’re an investor, but completely understandable given the uncertainty that this situation creates.

However today brought good news to the Route1 camp. The Government Of Canada has awarded Route1 a National Master Standing Offer (NMSO) to buy their products. The NMSO is worth up to $20 million CDN which I would think would add a significant bump to their bottom line. Investors clearly think so as the stock has shot up to $0.09 a share as I type this.

So, what does this all mean? The breakthrough that I thought would come this year is starting to happen. That’s good for Route1 as it seems that they are going to be the next great Canadian success story. However, the situation with the removal of their founder and CEO as well as the attempt to replace the board creates some uncertainty that may derail this.

Hopefully this situation gets sorted quickly and Canadians can watch another high tech company rise as it would be a shame if this company and their really cool technology couldn’t realize their full potential.

Route1 Completes DHS Deal…. Stock Soars… Sort Of….

Posted in Commentary with tags , , on April 29, 2009 by itnerd

You might recall that I had talked about a deal that Canadian software company Route1 had landed to provide its remote access services to the Department Of Homeland Security. A press release today indicates that they have completed the installation of their DEFIMNET (DEFense Identity Management NETwork) system:

The DEFIMNET platform also supports the newly introduced Telework Improvements Act of 2009 by enabling United States Government federal employees to securely perform their duties and responsibilities from home or from other work sites removed from their regular place of employment. DEFIMNET enables federal agencies to comply with the Act’s teleworking technology guidelines and incorporates telework into their continuity of operations planning (COOP) strategy, such that mission critical personnel are equipped to telework in time of a catastrophe. DEFIMNET controls access to and protects agency information and information systems, limits the introduction of vulnerabilities and safeguards wireless and other telecommunications capabilities that are used for teleworking.

Given the Swine flu outbreak, this likey couldn’t have been completed at a better time for both parties. This has caused the stock to shoot up from it’s opening value of $0.04 CDN today. Okay, it’s a penny stock on the TSX Venture Exchange that’s currently at $0.055 cents as I type this. But given this little tidbit, it may not be a penny stock for long:

In addition, the Company announced in January 2009 that it had entered into an exclusivity agreement with Qwest, granting Qwest the exclusive rights to resell Route1’s solutions to the U.S. Federal Government for 2009, which would include sales to DHS. In exchange for Route1 granting this exclusivity, Qwest has committed to purchase and accept for delivery in 2009 a minimum of 30,000 Route1 MobiKEY(TM) devices along with 30,000 TruOFFICE one (1) year subscription-based services, which is valued at approximately US$8.0 million. The future reoccurring revenue stream to Route1 from these 30,000 TruOFFICE one (1) year subscription-based services is estimated at US$5.5 million per year.

“With this binding purchase commitment from Qwest in 2009 plus our current subscriber base, we will have surpassed our break-even point on an annualized basis and will start generating positive earnings and cash flows in 2010,” said Andrew White, President and CEO of Route1. “We are proud to be recognized as a leader in the provision of security solutions to a complex organization such as DHS, and look forward to further adding value to other government agencies in the U.S.”

They say that the proof is in the pudding. So we’ll see if this happens for them. All I know is that I use their stuff and it’s  great, so perhaps this is another step to that “big thing” that I spoke about when they originally landed that deal.

Canadian Software Company Scores Again With An Agreement To Sell To The US Government

Posted in Commentary with tags , on January 7, 2009 by itnerd

The last time I talked about Route1, it was in reference to a deal that they just reached to sell its remote access technology (which I personally use) to the US Department Of Homeland Security. Now they’ve backed that deal up with a new deal to sell 30,000 of their MobiKEY USB devices to Quest Communications for resale to the US Government:

As part of the agreement, Qwest has committed to purchase a minimum of 30,000 Route1 MobiKEY(TM) devices along with TruOFFICE(TM) subscription-based services, which is valued at approximately US$8.0 million in 2009. The potential reoccurring annual revenue stream to Route1 from these 30,000 TruOFFICE subscription-based services is estimated at US$5.5 million. In addition to the purchase commitment, Qwest will provide advertising and marketing support to promote Route1’s solutions to various U.S. Federal departments and agencies. Qwest will also provide network-hosting services to Route1 from their facilities.

I believe that this deal again validates the fact that Route1 has some really cutting edge technology that companies who are serious about providing secure and simple remote access should look at. After all, if its good enough for the US Government, it’s should be good enough for anybody else.

Canadian Company Sells It’s Technology To Homeland Security

Posted in Commentary with tags , , on October 1, 2008 by itnerd

Frequent readers of this blog will know that I have written about the MobiKEY made by Route1 Inc. on a couple of occasions. Well I was surprised to hear that Route1 has sold their technology to the U.S. Department Of Homeland Security via their partner Quest Communications:

“Route1 Inc. (TSX-V:ROI) and Qwest Communications International Inc. (NYSE: Q) today announced they will deliver Route1’s highly secure identity management and dynamic Virtual Private Network (VPN) platform to the United States Customs and Border Protection (CBP), a part of the Department of Homeland Security (DHS). The initial three-year deal is valued in excess of $2 million and is being delivered through Route1’s reseller partner, Qwest Government Services Inc. under the Washington Interagency Telecommunications System (WITS) 2001 Crossover contract. This agreement is the beginning of a multi-year implementation and covers the license of a DEFIMNET™ with the first 500 TruOFFICE™ subscriptions included.  DHS has the option to acquire up to 95,000 additional subscriptions for TruOFFICE and other Route1 services over the life of the contract on the initial hardware.”

This is a huge deal for this company. Route1 is a small company in Toronto who has been fighting for market recognition and sales for its cutting edge remote access technology. This sale gives U.S. Homeland Security the ability to deliver its users secure remote access, and it puts another Canadian company on the map. I’ve been using their technology for a while and I’ve been hoping that this company gets a big breakthrough to take it into Research In Motion territory. It may be happening for them right now.

I’d watch this company. I believe that big things are coming from Route1 in the next little while.