Just When You Thought You Knew What to Expect
Several recent headlines
offer new twists and turns on the road to mainstream biometrics
The demise of Pay-by-Touch
has received considerable attention from both inside and
outside the industry. Yet, many of the conclusions drawn
from this company's misfortunes seem to miss the point.
Contrary to the mainstream press assessment (see Wall Street Journal, 3/19/2008),
this was not yet another failure of biometrics. It was a sketchy business
run by a cast of questionable characters and apparently funded by
a group of sophisticated investors that did not do their homework.
Sequiam's announcement of the abrupt exit of their rather
CEO, Nick VandenBrekel, was followed shortly by a Chapter 11 filing
announcement. Apparently the investor group behind the company -
Biometrics Investors LLC - now believes
their interests are best served by folding their Sequiam investment
into rival bioMETRX.
Guess Black and Decker door locks does not a
successful business make.
The UK has decided that biometric enrolment -
one of the most critical, costly, complex, yet largely ignored
issues in biometrics - is best left to
the private sector. A realistic approach that faces
considerable and largely reasonable blow back given
the state of commercial (and public sector) data security.
L-1 appears to be
locking up the US Drivers License
business with the acquisition of Digimarc. No doubt
this gives the biometrics behemoth an even broader
footprint in the human ID market. The question now for L-1: how will this
expanding Medusa corral it's asset portfolio to
become the virtual Titan of
This edition of the eUpdate
examines these events and provides Acuity's unique take on
how they fit into the broader context of biometrics market development.
As always, your feedback is welcome.
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C. Maxine Most
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C. Maxine Most
Acuity Market Intelligence
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The Demise of Pay-by-Touch
represents a "business" failure not a "biometric" failure. The company offered an innovative retail payment processing solution based on the unique capabilities of biometrics. There is no indication that the biometric component of the solution is to blame for the failure of the effective deployment of the solution, nor the company itself
Far to often, technology is considered the culprit of a failed business
enterprise. Pay-by-Touch was a poorly managed company led by an
executive team with questionable capabilities and ethics.
By all accounts, the biometrics are not to blame. Contrary
to what many naysayers predicted, consumer uptake of the
Pay-by-Touch biometric payment system was not met with
widespread protest or alarm. Quite the opposite was true.
Many consumers happily signed up for the service as it
offered a convenient, alternative method to purchase groceries.
Pay-by-Touch broke new ground by offering a service-based
transaction model for biometrics. It is not clear that this
model, any more than the enabling biometric technology, was
responsible for the failure of the company.
In fact, this service-based, transaction enabling
approach will likely become mainstream over the next
(See Acuity's "The Future of Biometrics" report).
Pay-by-Touch may have had unrealistic goals, squandered investor cash, mismanaged operations, had an untenable revenue model, completed unwise acquisitions, as well as a host of other sins. However, they did attract over 3 million consumers and provide a service that worked.
There are far too many examples of biometric deployments gone awry
where prognosticators, pundits, and protesters proclaim the
"failure of biometrics". Time and time again, it is the solution or
business model that fails; not the technology.
Biometrics, like any other technology, has inherent limitations.
For the most part, these are well known and have to do with the
nature of the technology. Biometrics measure human beings --
imperfect, inconsistent, unpredictable human beings. There never has been
and there never will be a 100% accurate
biometric. Then again, this is true of all technology. It
is simply not possible to be 100% accurate measuring anything,
yet everyday we rely on a host of "imperfect" technologies that
enable us to operate machinery, run complex computer systems,
test DNA, and send human beings into space. The
technologies all perform within known limitations and
constraints that we have mastered in a way that allows
us to confidently perform tasks from the mundane to the life
threatening with acceptably levels of uncertainty.
Why hold biometrics to a higher standard?
To be fair, the biometrics industry bears some of the blame.
The legacy of over-promising and under-delivering of biometrics
technology is undeniable. Overreaching performance claims need to
be legitimately challenged. Acceptable operating failure constraints
need to be understood and managed, especially when the assertion or
denial of specific rights, privileges, and civil liberties are at stake.
However, throwing the proverbial "baby out with the bathwater" is an
overreaction. It will not lead to a constructive process of evaluating
the true and unique capabilities of biometrics and leveraging them,
as and where appropriate, to enable convenient, secure transactions
or a host of other applications where who we are matters.
Shake-up at Sequiam
Here is the official "skinny" from Sequiam
Biometric device manufacturer Sequiam Corp. filed for
voluntary Chapter 11 bankruptcy reorganization on March 15.
The Orlando-based company intends to
conduct business as usual while it
resolves operational and liquidity issues and develops a
The company has accumulated $30 million
in debt developing its technologies over the past six years
with projected revenues of $6.5 million in 2008 and $30 million in 2009.
its financial woes are in large part due to the failure of
Biometrics Investors LLC to
honor a March 2007 agreement that would have
advanced the company $800,000.
Sequiam's stock price is down to 2 cents per share in spite
of its high profile licensing
agreement with Black & Decker's Kwikset division for biometric
door locks. It's founder and chief executive officer, Nick
VandenBrekel, recently resigned for personal reasons.
The reality is that
Sequiam's lead investor -- New York-based Biometrics Investors LLC
(which the company accuses of reneging on as much as $3 million
in promised financing) -- has jumped ship for Sequiam's lead rival --
This "jump" involves the takeover of Sequiam and the sale of its
assets to bioMETRX.
Both companies have bet their futures on the imminent adoption
of consumer biometrics including
residential security -- door locks, garage door openers, etc. --
and personal electronics -- mobile phone, laptops, PDAs, etc.
And, while there has been progress on this front and both companies
claim to be on the verge of major sales breakthroughs, the financial
results tell a different story.
There is no doubt that
shenanigans are at work behind the scenes. Yet these events
are quite a departure from Sequiam's hullabaloo about the Black and Decker
deal and the bravado of former CEO Nick VandenBrekel.
bioMETRIX believes Sequiam cannot salvage their business and
is working with Crestview Capital --
majority owner of Biometrics Investors LLC -- to find a way to
amicably consolidate the two companies. Meanwhile, Sequiam expects
to file suit against
Biometrics Investors LLC for engaging in "a series of
tortious acts designed to transfer (it's) assets to its competitor".
Is it just me, or does there seem to be an unusually high level of
drama -- often personality based --in the biometrics market?
In an effort to drive down program costs, the UK Home Secretary
has announced that it will rely on
the private sector to collect biometrics for the National ID card.
The prospect of commercial entities vying for citizens'
biometric enrolment business is somehow disconcerting. Yet, this
is the likely scenario for future biometric enrolment. (FYI: I serve
as an advisor to a company working
on a commercial enrollment model. But this is the result of,
rather than the reason for my belief in the inevitability of this
It actually makes fiscal sense and potentially
provides greater security to have independent government
certified commercial entities collecting biometric data for
both government and commercial applications.
- Developing independent enrolment solutions for every
biometrically enabled program or application is not practical.
It is cost prohibitive and too cumbersome for citizens and
- The biometric enrolment process is simply too costly to
justify unique enrolment for every program and application
in which citizens or consumers must, or choose to, participate.
- The notion that biometric data will be as freely
available to hackers and ID thieves tomorrow, as the rest of
our personal and financial information is today, is unacceptable
to citizens/consumers and should be to governments as well.
I strenuously object to the introduction of large centralized
registries where biometric and personal data are intermingled.
However, I do believe that creating non-networked vaults
store biometric records independently of other personally
identifying information, and where these records are controlled
by the individual who owns them is a viable approach.
From these vaults, expirable biometric templates could be
distributed and authorized, or revoked, for commercial or public
sector purposes based on the expressed wishes of the owners
of the data.
L-1: Biometric Medusa or Titan?
L-1 continues to make news and history by becoming
the single largest independent multi-biometrics player in the industry.
The latest acquisition of Digimarc adds breadth to their portfolio, fuels their
and furthers a sense of uneasy hope across the marketplace.
Many small and/or struggling biometrics players are not sure whether to flirt
and flaunt to attract similar attention, or to lay low and benefit
from related market growth while avoiding a buy-out offer
they might not be able to refuse.
L-1's rapid acquisition strategy has easily propelled them to rock
star status. By many accounts, L-1 is the defacto industry
leader. Their success in effectively leveraging the acquisitions to
build business and investor value is yet to be determined. Their
biggest challenge may very well be negotiating marketplace position vis-à-vis
the government integrators that are sometimes their partners and
sometimes their competition.
L-1 is in a unique position to establish clear leadership in
human ID solutions development providing unparalleled expertise
in bridging the "human-machine identity gap". Can they accomplish
this Titanic feat? Time will tell if they can transform their
many-headed organization into the premier market master.
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Security Document World 2008 and Identity Loop 2008
Science Media Partners is delighted to announce its keynotes and full programme for Security Document World 2008 and Identity Loop 2008.
With more than 50 expert presenters from around the world, covering key issues including ePassport/eVisa developments, Extended Access Control, Advances in security document technology, the e-ID landscape and infrastructure, as well as a full day session on Registered Traveller schemes, Security Document World and Identity Loop 2008 promises to be the leading ePassport, e-ID, security document, border control and government identification event this year.
Alongside the conference is a world-class exhibition with over 50 exhibitors from every part of the industry, including companies involved in the manufacture and supply of ePassports, eVisas, national ID cards, drivers' licenses and health cards, multi-biometrics, smart card and RFID technologies used in registered traveller schemes, border control, law enforcement, large-scale identity programmes and door-to-desktop physical and logical access control solutions, and much more.
The event is to be held on 22-23 April 2008 in the heart of London's vibrant Covent Garden district. Download
the full conference programme or sign up to visit the exhibition.
For general information contact:
Mark Lockie, Event Director,
Tel: +44 (0) 29 20 560458
For exhibition/sponsorship contact:
Pam Chattin, Exhibition Manager,
Tel: +44 (0) 1322 663006
Acuity Presentations & Recommended Events
Want more from Acuity
up-close and personal? Acuity's
Principal, C. Maxine Most, will be speaking at
the Voice Biometrics Conference in New York City in May
and may be found wandering the conference sessions and
exhibit hall at the Identity Loop and Security Document World
conferences in London in April. See you then!
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