The security hardware and software company Vasco Data Security International Inc. of Oakbrook Terrace, Ill., has bought an Austrian vendor of smart card software to expand its menu of authentication products.
Vasco announced Tuesday that it had paid $1.5 million in cash for Logico Smart Card Solutions of Vienna on Friday.
The privately owned Logico sells software that is used to authenticate smart card users when, for example, they want access to a corporate network. Its main customers are government agencies and health-care and manufacturing companies.
Jan Valcke, Vasco’s president and chief operational officer, said Tuesday that banks using its card readers have had to use encryption software provided by smart card manufacturers. Furthermore, those that switched card providers had to install new encryption software.
The Logico software is designed to work with all smart cards; neither Vasco nor Logico manufactures smart cards.
“I’m not surprised to see Vasco acquiring a software company like Logico,” said Gwenn Bezard, a research director at Aite Group LLC of Boston. Vasco “needs to bulk up” its software offerings, he said.
In particular, Vasco needed to have encryption software compatible with smart cards from different suppliers because “very few companies are going to buy from a single vendor for their various needs,” Mr. Bezard said.
Logico’s public key infrastructure software is “fairly heavy authentication technology,” he said. PKI software is widely used to authenticate employees, and its use is becoming more common, Mr. Bezard said.
“It’s probably a natural step” for Vasco “to get into the PKI game, because that’s a space that’s picking up some momentum,” he said.
Vasco’s rival in passcode tokens, RSA Security Inc. of Bedford, Mass., also bought an authentication software company recently. Last month it paid $44.7 million for PassMark Security Inc. of Menlo Park, Calif.
For Vasco, the ramifications of that deal go beyond a rival’s getting bigger. Vasco and PassMark formed a marketing relationship in February, but last month RSA’s chief executive, Art Coviello, said that partnership would “diminish decidedly.”
Mr. Valcke seemed unfazed. Vasco and PassMark had not begun to work closely, he said, and Vasco already has something to compete with RSA and PassMark’s software: online one-time-password software called Digipass for the Web, which it started selling this year.
Last year Vasco made another purchase meant to strengthen its smart card business. It bought AOS-Hagenuk BV, a Dutch maker of smart card readers, for $4.8 million in cash and $1.6 million in stock.
