SSH COMMUNICATIONS SECURITY INVESTOR UPDATE

Transcription

1 SSH COMMUNICATIONS SECURITY INVESTOR UPDATE Kaisa Olkkonen, CEO

2 CONTENTS SSH Background and Business Q3 Financial Update IPR Update The Cloud Opportunity Our Strategy 30 November 2017 SSH Communications Security 2

3 SSH BACKGROUND AND BUSINESS

4 WHAT IS SSH ABOUT 1 Inventor of the SSH protocol the backbone of Internet security demanding customers worldwide patents 4 Industry-leading products years of engineering excellence 30 November 2017 SSH Communications Security 4

5 SIMPLIFIED OVERVIEW OF OUR CURRENT OFFERING Simplified deployment architecture Key products Workstation networks Internal users 3 Servers and network devices 1 Tectia SSH Solution to enable encrypted connections 1 Management network 2 2 CryptoAuditor Control and monitoring of encrypted connection Workstation networks External users Universal SSH Key 3 Manager Accounting for and administering the keys Host and cloud environments 30 November 2017 SSH Communications Security 5

6 IF IT INFRASTRUCTURE WERE A HOTEL... Key products 1 Tectia SSH Provide keys to allow safe entry into the rooms 2 CryptoAuditor CCTV cameras to control and record movement 3 Universal SSH Key Manager Administer and account for the keys 30 November 2017 SSH Communications Security 8

7 THE MARKET IS GROWING MARKET GROWTH CONTINUES INSIDERS ARE THE KEY THREAT AWARENESS IS INCREASING Projected CAGR of 9.5% between 2016 and 2021 Top 3 sources of security incidents Current employees Former employees 30% 35% 42,8 Hackers 22,7 24% 24,9 28,9 9,4 3, Zion Research: Cyber Security Market Trends and Forecast (August 2016) PwC GSISS 2015: Number of detected security incidents (millions) with sources The Economist (May 28,2016) 30 November 2017 SSH Communications Security 9

8 Q3 FINANCIAL PERFORMANCE

9 Q3/17 KEY FINANCIALS Key financials 3Q16 4Q16 1Q17 2Q17 3Q17 Sales M 3,7 4,1 3,1 3,7 3,0 OPEX M 5,5 7,8 4,5 4,2 3,5 EBIT M -2,3-4,6-1,7-0,7-0,8 % EBIT % -63,8-113,7-53,8-18,1-24,8 Personnel ,5 2,0 Sales by region (M ) Comments Disappointing net sales Decrease of 17% YoY Decrease of 17% QoQ Regional performance varied EMEA still sluggish, invoicing better Americas net sales weaker APAC normalized after very strong Q2 1,5 1,0 0,5 0,0 Q316 Q416 Q117 Q217 Q317 Americas APAC EMEA+RoW Cost controls are working Operating loss decrease 65% YoY Opex decrease 17% QoQ

10 STRONG CASH POSITION YTD Q Balance Sheet M 17,5 21,8 21,8 20,6 Cash and cash equivalents Cash flow from operations M 6,1 11,3 7,8 11,4 M 1,8 0,3-8,1-1,4 ROE % Equity ratio % Gearing % Cash flow from operations improving YTD negative Q3 slightly positive Strong cash position Profit/loss per share EUR -0,00-0,15-0,36-0,12 Equity per share EUR 0,25 0,36 0,24 0,30

11 HIGHLIGHTS FROM Q3 Improving sales fundamentals Open pipeline increase of 40% during Q3 Strong customer interest for PrivX On- Demand Access Manager sales cycles still long Several enterprise deals progressing largest YTD license deal closed on October 4 Improving cash flow Positive cash flow from operations during quarter Firewall Good progress in certification Good results from performance testing Focused marketing Use-case (GDPR, 3 rd party access) driven CryptoAuditor marketing Release of ISACA* compliance white paper Continued increase of web site traffic * Leading international professional association focused on IT governance 30 November 2017 SSH Communications Security 11

12 IPR UPDATE

13 THE IPR PICTURE OUR PORTFOLIO PRODUCT COVERAGE VALUE CREATION We have a strong IPR portfolio, based on our 20+ years of industry leading expertise 100+ patents and patent applications globally Strong portfolio especially in US and Europe Core Internet communications Universal Key Manager CryptoAuditor Firewall PrivX On-Demand Access Manager Active patent licensing program for revenue Differentiation & barrier to entry for competitors Freedom to operate 30 November 2017 SSH Communications Security 13

14 PATENT LICENSING UPDATE UK Infringement Case Permission to appeal granted German Infringement Case High court overturned the first instance non-infringement decision Final decision awaits validity ruling German Validity Case Decision expected in H1/18 USPTO Inter Partes Review Patent found invalid Amended US Patent Granted Covers key aspects of the above patent, problematic issues corrected Further patents filed for Protection for key features of PrivX On-Demand Access Manager Licensing negotiations ongoing 30 November 2017 SSH Communications Security 14

15 CLOUD: THE BRAVE NEW WORLD

16 THE CLOUD CHANGES EVERYTHING "Cloud-first strategies are the foundation for staying relevant in a fast-paced world -- Ed Anderson, Gartner Source: Vmoksha Technologies (2017) More than $1 trillion in IT spending will be directly or indirectly affected by the shift to cloud during the next five years, said Gartner, Inc. This will make cloud computing one of the most disruptive forces of IT spending since the early days of the digital age. -- Gartner 30 November 2017 SSH Communications Security 16

17 CLOUD: NOT ABOUT TECHNOLOGY, ABOUT BUSINESS The cloud is having a measurable impact on business 20.7% Average improvement in time to market -16.8% Average reduction in IT maintenance costs 19.6% Average increase in company growth -16.2% Average reduction in operational costs 18.8% Average increase in process efficiency -15.1% Average reduction in IT spending Source: Vanson Bourne: The Business Impact of the Cloud 30 November 2017 SSH Communications Security 17

18 THE STAKES ARE HIGH Global annual cybercrime costs will grow from $3 trillion in 2015 to $6 trillion annually by Cybersecurity Ventures Equifax s market value, which has collapsed by a third in a few weeks as a result of the scandal, is down by $6 billion. Market Watch 30 November 2017 SSH Communications Security 18

19 THE AMOUNT OF DIGITAL ASSETS GROWS EXPONENTIALLY Today there are 7 billion people, about 850 million web servers online, and about 4 billion zetabytes of digital content worldwide. By 2022 there will be 8 billion people, billion networked devices globally, and 96 zetabytes of digital content is estimated to exist. David Bray, former CIO of FCC 30 November 2017 SSH Communications Security 19

20 SECURITY IS SLOWING DOWN THE CLOUD TRANSFORMATION Top challenges holding back cloud projects Concern about the security of data 73% Concern about regulatory compliance Loss of control over IT services Knowledge and experience of both IT and business managers Concern over compromised accounts or insider threats Concern over business continuity or disaster recovery Source: Cloud Security Alliance: Cloud Adoption Practices & Priorities Survey Report 38% 38% 34% 30% 28% Focus areas of SSH 30 November 2017 SSH Communications Security 20

21 EXPLOITING THE OPPORTUNITY

22 PRIMARY DRIVERS FOR (PRIVILEGED) ACCESS MANAGEMENT 30 November 2017 SSH Communications Security

23 CLOUD SECURITY GROWS FAST OVERALL INFORMATION SECURITY MARKET CLOUD SECURITY MARKET 9.5% 26% vs. Sources: Zion Research 2016; MarketsandMarkets 2017 The cloud security market grows significantly faster than the overall information security market 30 November 2017 SSH Communications Security 23

24 OUR GROWTH EQUATION ELIMINATING THE SYSTEMIC PROBLEMS INTRODUCING DISRUPTIVE NEW TECHNOLOGIES EXPLOITING THE CLOUD OPPORTUNITY ACTIVELY MONETIZING IPRS Reshape and widen offering for a more strategic vendor position Reposition SSH into relevant segment(s) Expand into more customer segments Rapidly introduce new technologies and products to exploit the cloud opportunity PrivX On-Demand Access Manager is the first step Use SSH s unique differentiators to establish leading position in Cloud Access Management Continue IPR creation and filings Actively pursue licensing Be prepared to protect our rights in courts if necessary 30 November 2017 SSH Communications Security 24

25 WIDER, MORE STRATEGIC OFFERING CryptoAuditor Universal SSH Key Manager Tectia SSH Premium server and client for Windows, Unix, and z/os API & Connectors PrivX On-Demand Access Manager 360 visibility and control Future-proof, no vendor lock Access Management at the Speed of Cloud Cloud Transformation Monitor & Control Manage & Automate Secure data-in-transit THINKING WIDER Making SSH a strategic vendor for enterprise customers Enabling SSH to reposition itself in a relevant category A wider offering alone does not create disruption or unfair competitive advantage unique differentiators are needed 30 November 2017 SSH Communications Security 25

26 FIRST DISRUPTION: PRIVX ON-DEMAND ACCESS MANAGER ROLE AND ATTR. DATABASE (AD/ LDAP/ AWS IAM) 2. Check and validate the role and identity 1. IT admin Connects IT ADMINS DEVELOPERS CLOUD AND ON- PREM INFRA 4. Access is granted based on the role PRIVX INDUSTRY FIRSTS Farewell to credentials Once-and-forget server configuration Adaptive role-based access control A USER 3. Create temporary role based credentials IT ADMIN DEVELOPER No workflow or workstation changes Clientless workflow 30 November 2017 SSH Communications Security 26

27 PRIVX: REVISITING OUR HOTEL In our hotel in the Cloud, there may be a nearly infinite number of rooms a nearly infinite number of guests checking in and out almost infinitely fast The traditional access management paradigm simply breaks down with the immense cloud scale speed and scalability are crucial for Cloud Access Management PrivX is the programmable, disposable electronic key card for our Cloud hotel 1 See page 8 30 November 2017 SSH Communications Security 27

28 THE PRIVX ON-DEMAND ACCESS MANAGER DIFFERENCE THE OLD WAY THE PRIVX WAY WHY THE DIFFERENCE MATTERS Static credentials (keys or passwords) that must be managed and are often compromised Manual server configuration changes Workflow and client modifications required Access granted per individual On-demand, single-use credentials that are not stored and cannot be stolen Servers are configured once, no manual changes No workflow or client modifications Dynamic role-based access granting for simplicity and speed Better security Less administrative work both in server configuration and access granting Vastly better scalability No changes to business flow FAST, SCALABLE, AUTOMATED, SECURE, MORE COST-EFFECTIVE 30 November 2017 SSH Communications Security 28

29 CORNERSTONES OF OUR DIRECTION DISRUPTIVE INNOVATION MORE RELEVANT POSITIONING MARKET EXPANSION IPR MONETIZATION PrivX On-Demand Access Manager Wider product offering Upcoming technologies and products Disruptive Privileged Access Management player Move upstream to Cloud IAM space Leveraging the cloud opportunity Supplement direct sales with a SaaS offering Increasing transtion into subscription model even in on-premises deals Continue aggressive value extraction to gain licensing revenue and strengthen SSH products market position Most compelling offering in the industry Significantly larger addressable market Tap the Cloud, wider customer reach Turn innovation and expertise into value 30 November 2017 SSH Communications Security 29

30 Q&A

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