How a small subsidiary of Hughes Aircraft became a global leader in identity management
By Zack Martin, Editor, Avisian Publications
HID Global enables workers to get in the front door of offices around the world. Many people see the three letters, either on their cards or access control readers, but odds are they don’t really know the company behind them.
HID originally stood for Hughes Identification Device, as in Howard Hughes, says Holly Sacks, senior vice president of marketing and corporate strategy at HID Global. The company was formed in 1991 as a subsidiary of Hughes Aircraft to develop radio frequency identification technologies.
The original 125-kilohertz technology, commonly referred to as proximity or prox, had been used in aircraft to track parts. The company’s founders thought there would be markets out there interested in using it for other purposes, says Selva Selvaratnam, senior vice president and chief technology officer at HID.
This was the start to a long journey that would see HID technology deployed across the globe and take it from a small company selling cards and readers to one of the largest and widely deployed identity products with 500 million issued credentials. Along the way HID would acquire other businesses, be acquired, and go through some minor name changes as well. Today the company, based in Irvine, Calif., has more than 2,000 employees and operates offices in more than 1,000 countries.
Four years after its launch, the company became a subsidiary of Palomar Technological Companies and changed its name to HID Corporation. It was at that point that the decision was made to focus efforts on RFID for physical access control, Sacks says.
The physical access control market was an interesting place to do business at that time, says Selvaratnam. There were vendors who supplied cards and vendors who supplied readers but often one didn’t do the other. “Magnetic stripe was the predominant technology,” he says. “At that time the biggest problem was you could buy readers from multiple people and the cards from someone else but then you would have to hope it was all compatible. The business model wasn’t working.”
Enter HID and its 125-kilohertz technology, Selvaratnam says. HID would customize its cards and reader specifically for customers to ensure compatibility.
But instead of selling directly to customers HID decided to use integrator channels and dealers to distribute products, says Sacks. “The channel strategy has been in place since the inception,” she says. “Customers want a full system solution and HID access control products are only one part of that system.”
By partnering with multiple integrators and distributing via channels, HID’s prox became a de facto standard for physical access control in North America. “We made it a cost effective, highly-reliable and a convenient solution that was easy to buy because it was available from multiple partners,” Sacks says.
Prox technology is still extensively used, but in the late 1990s HID started preparing for the next step: iCLASS, its high-frequency contactless smart card product line.
From an access control user’s perspective there isn’t much difference between a prox card and a contactless smart card. Basically, the card is held up to a reader and it opens the door.
With proximity technology, the card is activated when held near the reader and the card’s serial number is transmitted over the 125-kilohertz spectrum. If verified the door opens.
Whereas a serial number is transmitted with prox, iCLASS cards and readers actually communicate back and forth. This enables the card and reader to identify each other as valid and secure, a process called mutual authentication. They are capable of this because iCLASS transmits at the higher 13.56-megahertz frequency, much quicker than prox. iCLASS and contactless smart cards also can store much more data than prox cards, manage multiple applications and perform encryption.
These new cards and readers were more secure than prox but back then they were also more expensive. The question then became, how do you convince people to make the switch?
Part of this job fell to Mark Scaparro, senior vice president of sales and marketing for the Identification Solutions Group at HID. Scaparro joined the company after ASSA ABLOY acquired it in 2001 and was overseeing product marketing.
iCLASS was officially launched in 2002. Between 2001 and 2006 Scaparro spent his time educating channel partners on the advantages of contactless smart cards. “Smart, powerful, trusted, those were the ideas behind iCLASS,” he says.
But it was a challenge. “How do you educate a channel and the end user on the fact that one day they’ll want a card that does more than open a door?” Scaparro says.
HID went to its channel partners who were doing more advanced deployments of prox and started touting the technology, Scaparro says. “We brought in system integrators and told them what the differences in the technology are and what iCLASS is,” he says. “People in North America didn’t know what this technology was.”
At the launch of iCLASS in 2002 there were videos and demonstrations showing what iCLASS could do. “In the videos we showed uses for the cards beyond opening a door,” Scaparro says. “We showed a person using the card to open the door, logging into a time clock and paying for something from a vending machine.”
There was one problem, though, these applications didn’t exist yet. To create them the company launched HID Connect in 2006, a program to help enable software developers create applications for iCLASS. The idea was to partner with the leaders in biometrics, logical access control, and a host of other solutions such as vending and time and attendance – then encourage these companies to write iCLASS-compliant applications. The HID Connect program now has more than 100 application partners.
If you supply the cards, why not supply the card printers?
HID worked with its partners to personalize about 15% of cards before they left the factory, but the other 85% were being customized after reaching the end user, explains Scapparo. In previous years it was not uncommon for plain white cards to be issued and just used to open doors, but the trend to do some type of personalization had emerged.
The company wanted to offer its partners and clients a solution for this client-site card personalization. In 2006 HID acquired Fargo Electronics, a leading card printer manufacturer.
By acquiring Fargo, HID was able to offer end users another option for card personalization, Scaparro says. “Before we acquired Fargo we were selling factory personalized cards,” he says. In the last year and a half it’s been interesting merging those strategies.”
In another effort to better meet the needs of end users HID has introduced its Corporate 1000 program, Scaparro says. This program is for large companies with multiple locations who want to make sure one badge will work at all the different facilities. Some 85% of Fortune 1000 companies are using the Corporate 1000 format, he says.
With the Corporate 1000 program HID deals directly with the end user to create a custom solution that fits the organization’s needs, Scaparro says. Previously HID would get an order from a channel partner, the cards would be shipped, but HID would have no idea how or where they were being used. With the Corporate 1000 program HID works with the end user to create a card that fits the unique needs of the issuer.
From the door to the desktop
While HID virtually owns the door, the desktop has remained somewhat elusive. The company’s newest initiative is a serious push into the logical access control market. “Some of the new applications that enable contactless cards for secure login will change the dynamics of the industry,” Scaparro says.
Corporate sales for HID continue to grow but the challenge is finding more uses for the ID badge, he explains. “People need a reason to move the ID card up the food chain and logical access control brings that compelling reason.”
One of the things holding businesses back from deploying logical access is the cost of expensive PKI systems, Scaparro says, but less expensive alternatives now exist making logical access more affordable, especially if the same card is used for both physical and logical access.
One of these alternatives was announced last fall by HID when Dell began integrating iCLASS contactless smart card readers into select laptops. “What opens your door now opens your Windows,” became the HID’s new marketing mantra.
HID sees the merging of physical and logical access control on one badge coming, but other applications are being added to the badge as well. Scaparro notes that corporations are adding transit and payment applications to badges for even greater functionality.
“The whole theme has changed from physical access only to identity management systems,” says CTO Selvaratnam.
Part of this switch is because the physical access control systems have become a part of an organization’s IT backbone, where previously they had been standalone systems, Sacks says. This is making it easier to use the ID card for more than building entry control.
The evolution of technology isn’t always a straight path. Eighteen years ago a technology used to identify airplane parts was expanded to open doors. Now that same card, albeit with different technology inside, may be used to open doors, pay for the train fare, make purchases and even logon to secure computer networks. That is quite a leap forward.