DICA produces encryption line

DICA Technologies Inc., which was created last year after the merger of a Portsmouth high tech firm and a German company, rolled out its first products earlier this summer. The new product line is part of a family of encryption tools designed to improve security for all communications carried by digital networks, particularly video conferencing transmissions. Executives for the company, which has made its American headquarters here in the Ocean State, said they are excited by the possibilities created by this merger and the new product line.

The merged company now has 70 employees worldwide, slightly less than half of whom work in Portsmouth. A fact sheet distributed by DICA’s marketing staff indicates they expect revenues to exceed $12 million this year, which would represent a 50 percent increase over 1998’s revenue.

As such, they are preparing for bigger and better things, already making way for a physical expansion of the local office, which is located in the Portsmouth Business Park, and looking to hire more workers, particularly engineering staff.

“We will probably increase in the order of 15 to 20 employees a year for the next two or three years (here in Rhode Island),” said Robert J. Stout, vice president of finance and operations. That would about double the company’s employment rate in Rhode Island, he added.

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DICA was created in November 1998 when Promptus Communications, Inc., of Portsmouth merged with Data TeleMark, which was based in Berlin, Germany. Both companies had been around for about 10 years at the time they merged Promptus had mostly focused on developing ISDN and video conferencing technology, while Data TeleMark worked on ISDN security issues. The name change officially took place on May 26th of this year.

”This is a natural and logical step following our 1998 merger with Data TeleMark,” said Frank Piepiorra, president and CEO of DICA Technologies, of the name change. “It enables us to go forward as one company and present a unified message to our customers around the world.”

The merger goal was to capitalize on strengths the two companies held in common, including a history of producing highly advanced network access products and a worldwide customer base, according to a company statement issued on May 26. Company executives also shared the same market vision: helping customers use ISDN and other existing network infrastructures in order to deliver new applications to end users.

”The driving factor of ISDN is video conferencing, followed by Internet access,” Piepiorra said. Both video conferencing and Internet access through digital networks, however, bring up security issues for the users, he added. ISDN stands for integrated services digital network, which is a set of digital telecommunications standards that transmit voice, video and data over standard phone lines. It is also a faster method of transmitting data than using a standard telephone line modem.

“Corporate America is getting more and more aware of the risks of public communication networks that has driven us to create these products,” Piepiorra said.

The encryptors are a way for companies and government agencies to “protect their assets” and “limit their liabilities,” he added. Encryption secures both ends of a transmission.

Though they already had been distributing one version of the encryptor – called the Basic Rate ISDN, or BRI, security device – for some time, DICA did not formally announce its commercial product line until June 1. That was due in part to the tight-lipped nature of some of their customers – including the U.S. Department of Justice – which use the encryption devices to protect sensitive communications. “They won’t talk to you about it,” Piepiorra said of the DOJ and its use of the BRI Encryptor.

It was in fact government officials that got Data TeleMark involved in developing ISDN encryption technology in the first place, Piepiorra explained. Officials from one government agency wanted to protect their communications and put out feelers to companies doing related research and development work.

Other clients that use DICA’s encryption devices include banks and some Fortune 500 companies. There are other U.S. government agencies that use the device as well, because, Piepiorra said, the government is now the largest ISDN user.

As the device has become more commercially viable, however, DICA has begun targeting three specific industries where the encryption technology may be highly attractive: medicine, finance, and distance learning, said Chris Sampson, a company spokesman.

The new product family is designed to provide end-to-end security for all communications carried by ISDN networks, according to DICA executives. The new products consist of the DICA 9000 PRI Encryptor, the DICA 7800 BRI Encryptor and the DICA SecMan Security Management System.

“Most users assume that because ISDN is digital, their ISDN-based calls are secure from eavesdropping, accidental interception, tampering or other security problems,” Piepiorra said. “Nothing could be further from the truth. Any information carried over an ISDN line, whether voice, video or data, is vulnerable, and companies should take every reasonable precaution to protect it.”

The DICA 7800 BRI Encryptor is the first security device capable of working anywhere in the world, and it provides real time, end-to-end authorization and encryption for one BRI line, according to DICA literature.

“This will probably double the revenue over the first year, based on the legacy products,” Piepiorra said. “We’re in the lucky position that we can make our bread and butter based on existing products.”

If all goes well with the company plans, he added, “we’re going in the direction of an IPO.”

The price tag for the encryption devices start around $1,900 and reach up toward $6,000.

”Certainly our challenge is to convince people that the cost of security is worth what we’re providing them,” said Stout.

But, he added, the merger was done to put both legacy companies in a better position. “I think it’s fair to say the merger took place because both companies saw (a need to combine products),” Stout said. ”Without coming together we couldn’t address the markets … neither of us could have done it alone.”