Thinking around product and product features

•August 25, 2010 • Leave a Comment

Prospect theory was developed by Daniel Kahneman, professor at Princeton University’s, and part of this is risk thermostasis, which is the model on how we perceive risks.

We all know that security is difficult, but in fact when it comes to selecting a security technology, there are certain drivers:

  • Buy what everyone else bought (Authority), this is what IBM leveraged on in the early days
  • Go with the known brand (Authority), this is companies such as Nike
  • Buy of greed (“I want this”), where the product has certain qualities that attract the customer. Apple have managed to get into this position, providing a user-experience not previously seen
  • Buy of fear (“I want to prevent something”), this is how insurance companies are making money.

In general it’s difficult to sell based on fear, therefore clever companies turns the buy of fear in buy of greed, which makes the sales much easier, “When people are afraid, they are much more willing to buy security to be safe“.

Buying security from a large company is much easier, and therefore it’s much easier to accept the deal. Buying from a large company isn’t necessarily bad, in fact it can actually be quite good, as the large company is able to share development cost among a larger customer base, and must always deliver good quality and cannot take the risks as small companies sometimes need to make. Consider the following, you are going to do skydiving and you need a parachute, two companies are selling what you need. First is the huge company, known to everyone, the second is a small niche-company that have cost-effective parachutes. Which brand would you select? For many, the answer would be based on Authority and buy what everyone else buys, and would accept the higher price. Companies that have authority must maintain their reputation, therefore they must deliver product consistently that people depend on.

User care very little about technology, and he shouldn’t for various reasons. But you still want to be safe, there are certain things you never buy based on price.

Social Sophistication, is what brings values to customer, provides relevant information to him, in his present context.

Technical Sophistication is what brings unique properties and solves a need, as the needs are satisfied using technology. Technical Sophistication happens in emerging industries areas, where engineers are developing new and innovative concepts that satisfies real customer needs. Once the technology is understood and mature, technology is hidden, and Social Sophistication,

Technology is digital and Users are emotional…..

A classic example is Ericsson, in the 90’s it was possible to check the battery level on the mobile, and the result was 3.8V. That didn’t mean anything for a user, the developers had absolutely no understanding of what users wanted to see, and instead the user had to adopt the technology instead of vice versa. Once a technology has matured, it is followed by a commercialization, which brings the technology to the market. In this transition, is when innovation happens, which is basically turning knowledge into money. The definition that 3M has of R&D is that research generates knowledge, and innovation creates money. 3M measures their innovation power in the amount of revenues they make on products that are 5years or younger, this is what makes them stay alert.

  • In the beginning, Cars was sold with repair kit included, after some years, this was removed, as customer didn’t know and didn’t care on how to fix problems
  • In order to get things working, we need to remove the complexity for the user.
  • We cannot train users in security, instead we need technical intermediaries, that package security into their product, where security reaches an acceptable level, and the product can be sold on greed, instead of fear.
  • Facebook is a technical intermediary, and care very much care about their technology, and how that works.
  • Personal ócommodity
  • Security will be integrated as a part of the way you buy“, where solution providers buy security, and being the technology intermediary´
  • Solution providers buy security companies
  • Solution providers are the technical intermediary, becoming utility companies.
  • “Security is provided bundled in greed sale.”
  • Cars sell security, as part of the package
  • Awards, reputation are signals, and that gives us the Lemon theory

Buyer have problem evaluating sellers, one good example is the “Used car signals”. In order to maintain a high price, it’s essential that the product have high trust, otherwise it will become commodity, and nothing to compete against.

Reputation is very valuable, companies take great care of their reputation, and they should, and security is not different.


Trust is good for business

•August 13, 2010 • 1 Comment

Online banking is about more than cost cutting. Banks are just waking up to its potential for increased revenue and new business opportunities. In this context, online security is not just a cost of business to be weighed against losses to fraud. It is the key that opens the door. But it will only work if banks change the way they build a business case for trust and security. Continue reading ‘Trust is good for business’

Secure eBanking Forum – Principles of Usability

•June 9, 2010 • Leave a Comment

Yesterday, we had our recurring “Secure eBanking Forum”, which is an event that we are hosting on a regular basis, inviting banks that have interests in strong authentication with usability and security. This time, our focus was on “Principles of Usability”.

Here is the presentation I did, which intend to be a thought provoking presentation on the principles of usability. It shares some of our experience in the field, and hopefully also provides you with some inspiration.

Will Google Wave kill or re-establish operator revenues – Is it time the operators grab the steering wheel

•May 28, 2010 • Leave a Comment

Apple cleverly stole the revenue stream from the operator, making Internet traffic commodity. Operators outside Japan have over and over again spent uncountable hours of time, trying to understand and copying the business success that iMode have in Japan…..

Apple understood it, took action, and has successfully become a dominant factor on the market.
By introducing a platform that is not only homogeneous and usable, using a managed AppStore, they have made this possible. In fact what they did was to make it convenient (and secure) for the customer to buy content online, and this was the key trigger for customers adopting this. By doing in this way apple created one of the biggest online stores ever seen.

Operators lost the battle of selling content! What’s left is SMS and call charges, but generation Y don’t call each other, they SMS, so the only real revenue stream left is SMS.

Operators should take great concern in protecting this asset as this might change, soon! And in fact they are by themselves pushing this to happen, and the reason is that openhandsetalliance is pushing Android, which will come packed with AppStore, but not only that, the most important change I expect to be Google Wave.

Google Wave will dramatically change the way people send message, chat, and it’s rather likely that Google Wave will replace SMS, as it will unify all the channels, facebook, messenger, email, SMS into one channel, where customer will use Google Wave.

If the Operator don’t understand this, they will lose the battle (here also). If they are clever they will leverage on Google Wave, and will be able to increase the loyalty of the operator, create new revenue streams, and sell Google Wave pre-installed in their mobile as a service to their customers.

Maybe it’s time for me to buy an Apple

•April 27, 2010 • Leave a Comment

Sometimes it feels nice to actually be able to predict the future in small leaps, Apple is planning MAC OS-X 10.7, and one of the more clever things they are doing is No software will be able to run on Mac OS X 10.7 without being approved and signed by Apple, Inc.,00.shtml.

In practical terms it means that I won’t need a virus software, all applications are “tested”, and those who violates, or are found to be violating code of conduct will be removed (thanks). Software developer can actually get money from this. More important, my computer won’t be running those Trojans…. The negative side, is that Apple is owning the root key, and any business that risks their business, will have problem to enter the validation process that Apple will be setting up.

Does this mean that computers will be safe in the future? This is an opportunity that computers will be more safe, but not safe enough, to only use a password to login to your bank. That won’t happen in the near future, as the management of computers you want to use to access your bank will still be hard and difficult.

Gemalto acquires Todos AB

•April 8, 2010 • Leave a Comment


Gemalto acquires Todos AB

Combination of Gemalto’s existing e-banking business and Todos AB creates world leader in internet banking security.

Amsterdam, Netherlands / Göteborg, Sweden – April 8, 2010 –  Gemalto (Euronext NL0000400653 – GTO), the world leader in digital security, today announced that it has completed the acquisition of Todos AB from investors led by 6AP, a fund belonging to the Swedish National Pension system. Terms of the transaction were not disclosed.

Headquartered in Gothenburg, Sweden, and employing 80 people worldwide, Todos AB is a leading provider of strong authentication solutions for internet banking. Todos has to date delivered in excess of 20 million products to over 100 financial institutions in more than 30 countries. Todos core offer is the eCode Suite, including the Todos Versatile Authentication Server (VAS), which enables strong authentication and transaction verification.

The Versatile Authentication Server supports all leading industry standards and is augmented by patented technology such as Dynamic Signatures. Using their EMV card and a Todos eCode reader, consumers can use their PIN code to securely sign internet banking transactions. An additional layer of security can be provided by displaying transaction details on the reader, so that users “sign what they see”, thwarting in particular “man in the browser” attacks. Over the coming months Todos will be integrated with Gemalto’s Identification and Access Management business line.

Commenting on the transaction, Oliver Piou, Gemalto Chief Executive Officer noted: “Todos is a perfect fit with our e-banking business, bringing a complementary customer base and extending the solution offering. The combined business creates a new leader to address the fast growing internet banking market worldwide”.

Ove Wedsjö, CEO of Todos added: “We are really thrilled to become part of the Gemalto family. Our combined products, customers and technologies establish us as the global leader in internet banking. Going forward, I am confident that we will be able to further accelerate our growth, thanks to our extended customer reach, ensuring a safer online environment for e-bankers everywhere”.

Mats Augurell, SVP and Head of AP Partner Investments commented: “We are very pleased with this outcome. We invested in Todos in 2001, having recognized the strong market potential and the Company’s technology edge.  In making our exit decision, we selected Gemalto as the preferred bidder, since this combination clearly represented the best match for customers, employees and shareholders”.


CEO Todos AB
Ove Wedsjö
+46 702 428787

About Gemalto

Gemalto (Euronext NL 0000400653 GTO) is the world leader in digital security with 2009 annual revenues of €1.65 billion, and over 10,000 employees operating out of 75 offices, research and service centers in 41 countries.

Gemalto is at the heart of our evolving digital society. The freedom to communicate, travel, shop, bank, entertain, and work—anytime, anywhere—has become an integral part of what people want and expect, in ways that are convenient, enjoyable and secure.

Gemalto delivers on the growing demands of billions of people worldwide for mobile connectivity, identity and data protection, credit card safety, health and transportation services, e-government and national security. We do this by supplying to governments, wireless operators, banks and enterprises a wide range of secure personal devices, such as subscriber identification modules (SIM), Universal Integrated Circuit Card (UICC) in mobile phones, smart banking cards, smart card access badges, electronic passports, and USB tokens for online identity protection. To complete the solution we also provide software, systems and services to help our customers achieve their goals.

As the use of Gemalto’s software and secure devices increases with the number of people interacting in the digital and wireless world, the company is poised to thrive over the coming years.

For more information please visit

Investor Relations
Vincent Biraud
M.: +33(0) 6 08 48 33 23

Corporate Communication

Isabelle Marand
M.: +33(0) 6 14 89 18 17


Catherine Durand-Meddahi
T. : +33 (0) 6 08 14 49 70

eGovernment with strong authentication brings massive cost savings

•March 24, 2010 • Leave a Comment

Most of the Swedish Banks are in the move towards making their customers become electronic citizens, by equipping their customers with a banking card that also contains an electronic identity. This enables the customers to access eGovernment functions, and making it more convenient for be an electronic citizen.

Banks need to equip their customers with a security solution, and each government agency alone don’t make a business case. Therefore the Banks in Sweden are reselling identity towards all agencies, and thereby achieving cost-savings, and together create a win-win situation. Maria Repitsch interviewed Kay Kojer, business developer at the Swedish Tax Agency.

The Swedish tax agency have 7.4 million citizens that make tax return each year, and it’s estimated that 4.45 million (60%) out of these makes it electronically. Mr Kojer mentions that there are huge savings in making it electronically.

Continue reading ‘eGovernment with strong authentication brings massive cost savings’