Interview with John Carter, President , e-DATA Corp.

FB
e-DATA has a very interesting background; could you please briefly tell our readers about this and what led the company to biometrics?

e-DATA
Certainly; e-DATA was originally founded in Germany in 1986, and like many companies at that time, we provided the traditional client/server access control systems — large enterprise systems, with all of the integrated features. In the late ‘90s, based on significant market research, e-DATA reached the conclusion that it was time to move to an embedded Linux platform and develop web appliance-based systems. In fact, e-DATA was one of the first companies to develop a Linux-embedded system. We have offered embedded systems on a Linux platform since 1999. Most access control customers now understand the value of embedded solutions over the costly client/server software architecture.

Shortly after 2000 is when e-DATA began moving toward biometric devices; we progressed in the same way as when we saw that the access was moving away from client/server architecture. Our research indicated that, ultimately, since the biometric technologies and sensory systems were improving, and as the public’s acceptance and expectations for proper authentication were being adopted, that it was time to become a leader in that area as well. As a result we developed our Fingerprint Key reader, which you’ve seen on our website and in our literature.

Making that move has allowed us to provide a higher level of authentication than we ever did when using cards. We’re finding that people prefer the accurate authentication that we are able to offer through biometrics. Beyond that, we found that we’ve increased our capabilities of speed and accuracy within the system, and the cost has become far more practical than it had been in the past. As you must know, for years in this industry – and I’ve been in this industry for approximately 27 years now — the things I heard about biometrics were that it was too expensive and that it wouldn’t work. Well, both of those issues have changed substantially over the last 10 years. We now provide a fast, reliable, accurate means of authentication at an affordable price.

An important factor that has moved many toward biometrics are the initiatives taken by the U.S. government particularly on the heels of 9/11. Our government agencies now require that every card has a biometric element within it, whether it be the Transportation Worker ID Cards (TWIC), Common Access Cards for the military (CAC) or the Personal Identity Verification (PIV II) cards, which are part of the FIPS 201 specification for federal facilities. All of these smart cards have a fingerprint component on board. In the case of e-DATA, we actually use the sensor within our reader that was approved by the government for all of those applications.

What we are now seeing happen, however, is that as biometric technology has been embraced by the government, for entrance into facilities, other have also began to accept it as a better solution. We also have reason to think that currently the government is considering using only biometrics for the access grants rather than producing expensive credentials that are used as a flash pass.

I believe that if one looks at some of the current card programs out there, they will see tremendous costs and little benefits. For example, the TWIC program, which I’m very familiar with — you have a card at a cost of $132.50, and there are a million and a half cards that are out there now. For the most part, transportation workers are paying the costs for that, which is proving burdensome for people, and at this point, still, a majority of those cards are simply being used as flash passes. I’d drive up to a seaport, pull out my card, and at many locations they’ll just look at my card and allow me passage; it’s only at very few portals that the card is actually being used with a Physical Access Control System (PACS).

I must say that currently, as far as smart card access with biometrics goes, the speed involved needs to be improved. For instance, we were just chatting about the weather. If you think of it as being 105 degrees here in Dallas today, at ports or border crossings in South Texas, the heat index would then put you at around 125 degrees. If you have 50 trucks lined up there and waiting to get in because they’re using their TWIC card, it’s then a problem for commerce and it’s a direct problem with the individual trucker — it’s hot, they get angry, it’s a situation. If you could move strictly into a biometric system, it would then be accurate, fast and practical, and many of those problems would be solved. Recently, I’ve spoken to a few government agencies that are looking at doing exactly that – producing a low-cost, flash-pass card to wear and biometrics as the only credential to enter and exit.

Just as we observed a move from the original client/server architecture to Linux-based in order to make it more dependable and affordable, we see a similar migration toward biometrics. Our goal is to provide a highly secure, more reliable and affordable solution to our clients. We believe that biometrics in conjunction with an open, embedded architecture satisfies that goal. I hope that provides you with a snapshot description of who we are.

FB
With your biometric integration expertise you are able to add biometric capability to low, medium and high traffic areas; could you please elaborate on what this means for us?

e-DATA
There are a couple of things here to consider. First, with the technology we have and the performance we have on board, we utilize a one-to-many verification. This means you simply present your finger to authenticate and it compares you to everyone within our database. Our one-to-many is quicker than most people’s one-to-one, where the one-to-one requires that you either present a card or credential, or you’ve entered a PIN that is used to retrieve your biometric profile to make that comparison. We have great speed within our system due to our processing capability on board. Our reader, in our opinion, is superior to those of our competitors, and is more practical in high traffic areas. So certainly, if you can deal with the highest traffic areas at a reasonable speed, then the lowest traffic areas will be no issue whatsoever.

The other thing we often discuss are the various ways in which our readers are deployed. Aside from standard access control, some examples include hospitals or medical facilities that want to protect a drug cabinet; data centers that protect the server room; in banks it might be a safe; or whatever room or cabinet you’d want to secure anywhere. If you look at any given area, typically biometrics will be added to the equation because the perception is that it will be needed in a secure area. Well, that perspective immediately tells us something, which is, in reality, if you require real security somewhere, you’ll use biometrics. So, typically, our customers first use our Fingerprint Key on a couple of sensitive-area doors while using other devices on the rest of our system. What begins to happen is that they find that the speed and ease in use of e-DATA Biometrics is much better than carrying cards. Quite often, it’s usually due to forgetting their card, or it being lost or stolen somewhere along the way. In many cases, they discover that cards have been loaned to others, which, of course, is a security risk. A common example is when cards are provided to contractors who service a facility. A smart company might even perform background checks or have a drug screening process only to find that the card issued to the contractor gets used by their other employees, such a new hire who hasn’t been screened or checked. This happens often when the primary service person is sick or on vacation. That becomes a serious security risk. With biometrics, that’s never the case. You are who you say you are when you’re authenticated by our device. As our customers begin to put greater trust in the reliability and speed of our biometric devices, they then start adding them to more areas and replacing card readers.

In some systems -- let’s say for instance, they only want to use our Fingerprint Key -- we can offer that and it will work with what we’ll call “Brand X” access control systems. They can use it as a standard Wiegand Reader. If they use e-DATA’s Fingerprint Key with e-DATA’s system, however, it can be connected as an RS485 reader; we can then propagate all the fingerprint templates, everything is transparent and the finger can be verified everywhere. Most of the “Brand X” systems won’t support the biometric enrollment or template propagation, so you would have to enroll at every device. That means if I want 50 people to be using that reader, I have to enroll all 50 at that reader. If I then put in another Fingerprint Key down the hall on another door, then I’d have to repeat the entire process of enrolling those same 50 on that door. What usually happens at that point is they’ll start carrying what we call Biometrics On Card. There’s a reader manufacturer that makes cards that also makes a read/write disc that you can put on the back of that card; in this way, users carry their fingerprint data from door to door, and that’s usually Phase 2.

Phase 3 emerges when people begin to say, “You know what, I don’t care for the cards at all; I don’t like the credential management; I don’t like to order in advance; I don’t like finding that I’ve received the incorrect format card — that either my site code didn’t match or that my format was different.” Or all of those instances where the cards can get lost, stolen, forgotten and passed around. So then they’ll start to want to propagate the fingerprint templates.

With the e-DATA solution, even if you want to continue using your “Brand X” client/server, enterprise-level architected system with our biometric readers, we have what’s called a Master Unit controller that you can use in the system and still propagate fingerprint templates. At that point, we are finding ourselves in high security areas, and in the low, medium and high traffic applications that are interacting with third-party systems. Our experience has been that if people simply begin to use the device, they begin to trust the device, and over time they see the improved security, cost-effectiveness and speed of access. We’ve had great success with our approach, and it certainly helps that, in general, we are seeing the market headed in our direction as well.

FB
Could you describe some of the benefits of your time & attendance products?

e-DATA
Absolutely. One of the solutions that we’ve developed over time, even back to when we were founded, is our time & attendance products. One of the first things that we discovered when we added in the Fingerprint Key technology was how much those products were needed in the time & attendance industry. One of the keys issues we found in our research is that about eight percent of the time there is what is referred to as “buddy-punching” in a time & attendance system. Let’s say for example, you and I work together, and I enjoy playing golf on Friday afternoons. We’ve been close friends for a period of time, so you may then clock me out at 5 p.m. when in fact I left at around 2:30. Or if you’re running late or stuck in traffic I might punch you in at 9 when you actually don’t arrive until an hour or two later. This “buddy-punching” activity can certainly be accomplished when using PIN codes as well as passing cards between each other at specific times. Eight percent that is fraudulently being taken out of payroll is a very expensive proposition for companies, whether they’re small or large. In fact, the larger a company becomes, the greater the dollar figures. With our device this “buddy-punch” is totally eliminated because it’s based solely on the Fingerprint Key check when an individual enters or exits. Users don’t need any other form of credential; it’s a matter of walking up, pressing a button, placing a finger on it, and the device verifies that it is that particular person. Eliminating that one issue tends to pay for the system’s cost, sometimes within the first six months, though usually within the first year. If you consider the fact that the system will probably be used for at least five-to-seven years, then it’s easy to see how there’s a tremendous upside to using biometrics in that application.

FB
Indeed there is. Now, do you face any challenges -- employee challenges — when implementing these time & attendance products?

e-DATA
No, not really; the only issues are the traditional issues. Ten years ago we would have faced an uphill battle trying to use biometrics in that application because there hadn’t been the general acceptance of its use in the way there is today. Therefore, the only real issues that we face are those traditional ones -- competitive features and functions of the system. For example, I want to ensure that I have an accurate GMT clock display on my terminal that you’re looking at because, if you’re telling me that I’m clocking in at 8:00, then I want to know that it is actually 8:00. That’s a traditional kind of time & attendance feature that you have to have and support, whether it’s biometric, card or PIN; no matter what it is, your clock needs to first be accurate. Beyond that, there might be some basic things that are market demands for reporting, data formats or open systems. We are confident that we have addressed those needs. And I would say the IT folks love us -- we’re an open architected system, embedded, Linux-based, so we kind of fall into the “mom and apple pie” category on that score.

FB
Are there any specific vertical markets that you’re focusing on?

e-DATA
Yes, there are. In fact, we have three different levels of time products. We have time clocks, which are used by companies that produce enterprise-wide time & attendance systems for the very large – the 50,000 to 100,000 employee facilities; they use just our clock, and they pursue that level of the market with their software. There are also companies that use our “midrange” products that encompass 1,000 to 5,000/10,000 employees, and they use it within their systems; some of them also provide hosted time & attendance applications that work well with our architecture.

The product that we typically take forward as e-DATA with our integrators is a software-embedded clock called Time1500, which is designed as an embedded device to handle up to 100 employees for time & attendance without client/server software. There are over two million companies just in the U.S. that have less than a hundred employees. We offer this product globally. What we have also found is that there are specific markets such as healthcare facilities, retail applications, chain food stores that find that product very appealing. For example, if you looked at Subway, Starbucks or any of those stores where you have several, hourly employees with a large turnover rate, and you may have a franchise owner who perhaps owns six or seven of those stores within a given area, then the ability for them to accurately punch in -- with no possibility for “buddy-punching” -- and the ability for them to easily manipulate the data for that number of people and do the reporting for that, it is truly a highly cost-effective solution.

FB
Do you see the residential market sector as a growth area for biometrics, predominantly in the physical access control portion?

e-DATA
Thanks for asking. The answer is yes indeed. We actually have a product that addresses that market very well, whether it’s high-end residential or gated communities, or high-end apartment or condominium complexes. We produce a standalone Single Door Unit Fingerprint Key that is used in those types of applications. We’ve found that some high-end homeowners will put those even on the gates that provide access to the pool or its equipment, or even just to the backyard, garage and various entrances to their house. We have some that have applied it to what could be deemed “safe rooms,” and even for storing firearms and ammunition in a specific closet or room.

This standalone single-entry product, actually, has been made available on Amazon.com. We found that there is such a demand for it and so many inquiries were coming in that we decided that online would be a better outlet for that product. It’s not what we would consider to be our commercial product, though it is a professional-grade reader. It’s still IP65-rated, designed for indoor/outdoor use, it’s ruggedized and all of that, but it’s not typically a networked product. Those who are looking for our networked product would get that through our integration partners.

We are even finding that when dealing with the high-end residential market, the ability to remotely connect to an IP appliance is of great value – to take a look at, for example: Did your pool maintenance, gardening crew or any of the house cleaners actually come in on a specific day? Did the contractor who’s invoiced you for work on a specific day really show up on that day? The ability to simply be able to click in and either allow a specific laborer access to your residence, or even to put in a temporary PIN along with biometrics -- in all those kinds of things we are seeing a steady growth in the market. Some of the growing demand is a result of crimes, such home invasions and issues surrounding the higher-end housing market that has been hit as a result of the economy suffering in recent years. Then again, some of the increase in this sector is because of the technology itself becoming more affordable, more accurate and far more practical to use.

FB
Interesting; I agree, as I also believe that this is a terrific market to target; my congratulations on your awareness to the potential in the residential domain.

e-DATA
Thank you.

FB
Has this been a good year for e-DATA?

e-DATA
I believe so. It’s been steadily growing, so yes it’s been a very good year for e-DATA. As I mentioned, I have been in this industry for approximately 27 years now. The owner of e-DATA is George K. Broady. George is well known and respected throughout the industry. George is our CEO, and he was also the CEO of Ultrak some years back. George and I have known one another for about 14 years, and I worked for him at Ultrak as well. I’ve recently come on board with e-DATA as President, and I can tell you that there are some very exciting things that are going on here. The economy is slowly improving, more projects are being put out there, but I think that the attractive thing for this organization is the general acceptance of biometrics as the technology of choice now. In the past, biometrics was considered a “2 percent product,” meaning that only about 2 percent of the market would use it and would use it in the applications that I described earlier. However, what I am finding is that people are calling us, they’re seeking us out, and they’re saying, “I’m just done with card and credential management; the costs and logistics and time away from the desk to enroll for that kind of technology, along with the frequency of cards being forgotten, lost, stolen or exchanged -- all of those things, we’re done with it.” They’re understanding the two things that I mentioned previously — that biometrics has matured into a reliable and cost-effective solution.

Being positioned as an embedded web/client access control system that is both open and portable, and because we are biometrically focused, allowing us to grow quickly, e-DATA is poised for a huge year ahead.

FB
Good to hear; thanks so much for taking the time out to speak with us today.

e-DATA Corp. is a leading manufacturer of Web-based appliances for fingerprint biometric access control and time & attendance. Requiring no servers or software, e-DATA’s embedded, scalable solutions are perfect for any application. e-DATA Biometric Access Control features global rights distribution and an outdoor-rated, three-factor reader. Learn more at e-data.com. Products and Services: Fingerprint, Physical Access, Time & Attendance, Healthcare, Financial and Transactional.