Firms try to lock up security market
VeriSign and Network Solutions joined to take over the digital certificate business.
Digital certificates are a kind of security software that serves as an electronic passport, verifying the identity of the client or the server to other machines. Their main purpose is to prevent Web servers from masquerading as something that they're not and reassure consumers that they're giving their credit card numbers and other confidential information to legitimate businesses.
Right now, certificates for clients don't have a lot of applications, but eventually they might be used as a kind of public notary system to let users electronically sign legally binding documents over the Web.
Network Solutions is the organization responsible for registering IP addresses and their associated names. Now, registrants will have the option to sign up for a Digital ID, the VeriSign version of the digital certificate, during the registration process.
"It has been somewhat cumbersome for businesses to get the domain name from one group, and setting up a secure site with us. This will really accelerate the process of getting into business," said Stratten Sclavos, VeriSign president and CEO.
The company's competitors include none other than the U.S. Postal Service and a GTE spin-off called CyberTrust. Itself a spin-off of RSA Data Security, VeriSign is already the established leader in the digital certificate market. But the deal with Network Solutions will give the company a substantial advantage.
The deal will accelerate VeriSign's business, perhaps exponentially. Sclavos says the number of digital certificates issued have increased about 10 percent to 15 percent per month, but InterNIC is registering "tens of thousands" of domain names per month. As a privately-held company, VeriSign doesn't release sales figures, but revenues should increase significantly for the company."This is really going to give it a turbo boost in terms of volume," said Sclavos.
Sclavos also predicts that the increased of digital certificates will also help grow the electronic commerce market, a market that many think will reach the $2 or $3 billion mark within the next three years. "Consumers are ready, willing and able to do things like stock trading, bill payments, and purchasing software. The ability to do it securely now will kick start the market," said Sclavos.
The new service will first become available in the fall. A server Digital ID's now costs $290 per year and $95 per year every year afterward while registering a domain name costs $99 every two years, but pricing for the combined service has yet to be announced.
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