The privately held digital security company Spyrus has added electronic wallet software to its portfolio of payment and security technologies.
San Jose, Calif.-based Spyrus said this week that it had acquired BlueMoney Software Corp., a pioneer in the field of server-side wallets, which have rapidly been gaining support in the community of electronic commerce developers.
For on-line transactions, server-side wallets hold customer payment information at a bank or merchant site rather than on the purchaser's personal computer. The earlier generation of PC-based, or client-side, wallets was a failure, in large part because it took too long for a consumer to download the software.
Early-stage Internet payment companies such as Cybercash Inc. originally touted client-side digital wallets as the on-line equivalent of the physical wallets from which consumers routinely make payment choices at points of sale. They have uniformly switched to server-based alternatives.
In BlueMoney Software, also privately held and based in Palo Alto, Calif., Spyrus adds automated payment capabilities to complement existing products and expertise in such areas as on-line credit card payments, smart cards and other secure hardware tokens, and digital certificates.
For example, BlueMoney promotes SET Network, a system capable of conforming to the MasterCard-Visa Secure Electronic Transaction standard and advertised as "the world's first secure network wallet."
Spyrus, through its acquisition two years ago of Terisa Systems Inc., has played a key role in the development and implementation of the SET protocol. Like BlueMoney and other vendors, Spyrus offers a range of security options-including those based on SSL, or Secure Sockets Layer-and therefore does not have to wait for SET acceptance to do business in the card-related part of the data protection market.
"Spyrus' acquisition of BlueMoney shows its continued commitment to e- commerce and to providing a broad range of digital-content security and payment tools for network application developers and integrators," said Spyrus president and chief executive officer Sue Pontius.
The company, which took in $20 million of revenue last year, did not disclose what it paid for BlueMoney. It joins a list of other Spyrus acquisitions that include Terisa, the Australian public key encryption infrastructure company Signet Systems, and Value Checker Plus, a handheld smart card reader originally developed by a unit of Oki Electronics of Japan.
The last two deals occurred in 1998. They reflected an effort by Spyrus to be able to serve all of a customer's data security needs. "We have all of the pieces," Ms. Pontius said in January when introducing the company's IES, or Integrated Enterprise Security, which encompassed both its own products and those of partners.
With Spyrus doing the heavy technological lifting, "our clients can focus on using the Internet to deliver new services, establish closer ties to their customers, and develop other revenue sources," Ms. Pontius said.
BlueMoney was founded in 1996 and the next year introduced what it says is the world's first server-side wallet. A patent is pending.
The company markets to on-line merchants and malls, Internet service providers and content developers, financial institutions, and individual shoppers. Its Web site has a free offer for "the only software-free electronic wallet for secure credit card payments," also "the first and only wallet available to America Online customers on the Web."
Like Spyrus, BlueMoney licenses data encryption technology from RSA Data Security Inc. It also lists several other partners, including the credit card independent sales organization Cardservice International, BBN Planet, and Sybase Corp.
BlueMoney's "e-commerce payment solution" includes the Titanium commerce server, an Internet gateway for credit card processing, and the consumer's BlueMoney Wallet.
"The fusion of Spyrus' secure enterprise solutions and BlueMoney's server-side innovations will create a new generation of products and solutions for business-to-business e-commerce," said BlueMoney CEO John Sweet. He is to remain with Spyrus as director of e-commerce and corporate marketing.
Mr. Sweet's co-founders, chief technology officer Jeremy Barrett and vice president of engineering Ben Kavanaugh, are now Spyrus senior research engineers.
In another personnel announcement, Spyrus hired Alex McIntosh as managing director for Europe. He spent 23 years with International Business Machines Corp., where he was instrumental in introducing PCs in Europe, and was more recently managing director of PCSL, an information security vendor in the United Kingdom.
Mr. McIntosh "has broad experience building large European businesses, knows the digital security industry, and has the relationships with the channel partners and targeted strategic partners we will need to grow rapidly in Europe," said Tom Dickens, Spyrus' global operating officer.
"Four years from now, we expect a European (public key infrastructure) market that exceeds $750 million per year and is 90% the size of the U.S. market," Mr. McIntosh said. "European customers will react well to Spyrus' smart-card-centric IES framework for digital content and network security. And the network security solutions will benefit from the strong growth in the use of the Internet by European enterprises."
