Communications interception, networked video benefit Verint

Verint Systems Inc., a firm specializing in key technologies for homeland security, is finding that it can compete with giants in the field by focusing on high-end, technology-driven solutions to resolve some of the most pressing homeland security needs.

Based in Melville, NY, the company, which reported about $200 million of sales in 2003, relies on security for about two-thirds of its sales. It offers communications-interception solutions used by intelligence services and law enforcement to track security threats and criminal behavior. It also builds sophisticated networked-video solutions to provide security for large infrastructure, such as subway lines, obviously an increasing concern in the wake of the terrorist attack on trains in Madrid.

This focus on key growth areas has resulted in rapid growth. In the company’s 2003 fiscal year ending Jan. 31, 2004, Verint’s sales in security solutions grew by 31 percent. These figure represented a boost in total sales from $131 million in fiscal 2001 to $193 million in fiscal 2003. Overall, the company reported a $4.6 million loss in 2001, compared to a $17.9 million profit in 2003.

Verint has achieved this success by taking on a number of larger companies. It competes against companies such as General Electric Co., Honeywell International Inc., Raytheon Co. and Tyco. Its formula is to focus on high-end technology markets, often of a size below the level of interest of its larger competitors.

The company’s actionable intelligence solutions are indicative of its ability to develop sophisticated products applicable in the war on terror.

Verint’s RELIANT system is sold to law enforcement organizations and intelligence agencies for live monitoring of intercepted communications and collection of evidence. It allows interception of voice, fax and data transmissions.

Communications service providers and communications equipment manufacturers use its STAR-GATE product to comply with legal authorizations to intercept communications. STAR-GATE automates interception of the communications, converts data into standard legal interception format and sends it to the law-enforcement agency requesting it.

Due to the sensitivities involved in communications interception, Verint rarely discusses specifics about new orders for its products. One international government customer several months ago placed an order involving a multimillion-dollar expansion of its program to improve its ability to gather intelligence from data and voice communications transmitted over wireless networks. Other customers include the US Department of Justice, the Dutch National Police Agency, the Toronto Police Service and other domestic and foreign law enforcement and intelligence services.

Visibility in video

Verint’s networked video security solutions have been much more visible in the market.

Verint Video Solutions provides intelligent recording and analysis of video. It can cover large areas of infrastructure, collect the data in a network over wires or wireless and use flexible storage. Most importantly, it does not involve passive monitoring but can alert users to possible security threats by using advanced motion detection technologies and analyzing individuals and objects to detect unusual behavior.

Verint has sold its network video solutions to protect military facilities, government facilities, private transportation infrastructure and private companies. The US Department of Defense is a customer, as is the US Capitol.

This year, Verint announced contracts to improve security for the London Underground, the Montreal Metro system, the Port of Galveston, the New Jersey Turnpike, Orlando International Airport, Kansas City International Airport, the Metropolitan Water District of Southern California and an unnamed UK government customer.

The company’s management is interested in making niche acquisitions to bolster its core businesses. Most recently, in September it purchased RP Security, a private company based in Flensburg, Germany. Verint already had a capability in networked video for fixed transportation sites, but saw RP Security’s capabilities in mobile transportation security for trains, businesses and taxis as an attractive enhancement to its own capabilities.

That followed last year’s $7 million purchase of SmartSight, Melville, NY, which was intended to bolster Verint’s wireless transmission and video management capabilities.

The company has also been making acquisitions to strengthen its position in communications interception. In a transaction that closed in February 2004, Verint paid $35 million for Israel-based ECtel’s communications interception business.

Verint shareholders have been rewarded well by the company’s growth. The stock, which traded for as little as $5.83 per share in July 2003, traded recently for more than $40 per share. 

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The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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