Leaving Fingerprints All Over the Tech Marketby Eric Wright
In Brevard, when we hear the word “spinoff” we usually think of space-based technologies like Teflon or GPS. But one of the most innovative companies on the Space Coast, AuthenTec, grew out of a collaborative effort between two divisions of Harris Corporation.
Back in 1996, the idea was to create a sensor that could provide a very clear electronic image of a person’s fingerprint using semiconductor technology. At that time, most fingerprints were either taken using the traditional paper and ink method or via very big and expensive optical scanners. The team created a working prototype product and spun off, in1998, to begin operations as an independent, private company.
A year later, AuthenTec began shipping its first fingerprint sensor in high volumes. During the next 14 years, they became the number one provider of semiconductor-based identity sensors in the world – over 100 million AuthenTec sensors have now been shipped.
From Local to Global
CEO Larry Ciaccia described their growth, “Today’s AuthenTec is very different from the AuthenTec that was founded in 1998, but we’re still centered around providing strong but convenient security for mobile and networking markets.
Our acquisition of the Embedded Security Solutions business of SafeNet, in early 2010, brought us a very large portfolio of encryption technology that helps protect mobile devices (smartphones, tablets, etc.) and network devices (servers, routers, etc.). That same year, we merged with our biggest fingerprint sensor competitor, UPEK, Inc., which added large area touch sensors for government and access control.” Today there is no other company with a similar portfolio of products, boasting a patent portfolio with nearly 200 patents.
Ciaccia added, “We are a much more global company now, with development centers (in addition to Melbourne, Florida) in the Netherlands, Czech Republic, China, Japan and other key geographic locations close to many of our customers.”
Maintaining Their Market Edge
The small team that developed AuthenTec’s technology included the company’s co-founders Scott Moody (currently a director) and Dale Setlak (a technical consultant). Venture capital was raised – including investment from Harris – and within a year they were producing their first products. The first sensors were a little larger than a postage stamp and required someone to press and hold their fingerprint on the sensor until a match was confirmed.
They continued to refine and develop those “touch” type sensors and the software required to match and compare fingerprints, and sold those products for use in PCs and access control products like door locks.
In 2002, they introduced their first “swipe” type fingerprint sensor, which allows someone to slide their fingerprint across a much smaller sensor area. These swipe sensors were more compact and less expensive, making them much more attractive to notebook manufacturers and mobile phone companies looking to add security and differentiation to their products.
Ciacco explained, “Our goal was to create technology that worked for everyone and was inexpensive enough that it could be easily integrated into a PC, mobile phone or other device.” Their success became globally apparent in 2007 when AuthenTec became a public company, traded on the NASDAQ under the ticker symbol “AUTH.”
Ciaccia became CEO in the fall of 2010, about the time AuthenTec was getting ready to acquire its largest competitor in the biometric field. Having joined the company in 2005, Ciaccia had multiple conversations over the years about succession planning with the company founder and then CEO, Scott Moody. Moody wanted to move to a board-only position eventually and the plan was for Ciaccia to take over his job when he made that transition. With such a large acquisition in the works, the timing just made sense to put the plan in motion. He had been running many of the critical pieces of the company for several years as president, so the CEO transition was logical and very smooth.
Ciaccia conceded that the biggest surprise he’s had at AuthenTec was how enjoyable it is working with very talented people in a smaller company environment. He explained, “My previous 25 years, before AuthenTec, were spent with companies that had thousands of employees. When I joined AuthenTec I was employee #40. It was refreshing and fun again to be in a smaller, more intimate environment where everyone’s role was clear and everyone’s impact is evident and measureable.”
He then added, “In terms of the industry, my biggest surprise is that, in many ways, it can be very hard to get companies, some of which are very well known, to make a bold move to differentiate their product. Yet there is still a strong ‘Follow the leader mentality.’ I am absolutely convinced our products can change the way people will make transactions in a mobile and web environment, and it just takes one leader to make the plunge for many more to follow.”
Apple Purchases AuthenTec
As this issue of SpaceCoast Business was going to press, it was announced that Apple was acquiring AuthenTec for $356 million in cash. The iPhone and iPad maker’s action underscores the ongoing need for securing mobile devices as the industry moves forward.