IronKey to use $22M investor funding to expand global market and partner reach

This secure managed portable storage, authentication and virtual computing vendor recently received $22M in funding from its investors and May Mitchell, vice-president of partner marketing at IronKey, says the company is using this money towards expanding its market presence, partnerships and solutions.

IronKey is a privately-held company that does business around the world and is headquartered in Los Altos, Calif. To date, the company has more than 1,000 customers, ranging from small to mid-size businesses (SMBs) all the way up to large enterprises, across 75 countries.

Mitchell said the company goes to market using a two-tier distribution strategy. In North America, IronKey has distribution partnerships with D&H, Synnex, and most recently, signed on with Bell Microproducts, which Avnet announced it would acquire back in March.

“We started recruiting partners back in late 2008 and in 2009, we started a two-tier distribution strategy,” Mitchell said. “D&H was our first distributor for North America, primarily focusing on the SMB market and our value-added distributor (VAD) is Simple Technology. With the other distributors and with the news that Avnet will acquire Bell Micro, this will give us more global reach and presence.”

Brian Muir, vice-president of business development at Concord, Ont.-based Simple Technology, said the distributor currently has hundreds of value-added resellers (VARs) that it works with across Canada.

IronKey inked its distribution agreement with Simple Technology three years ago, where roughly three to five per cent of the distributor’s total revenues came from its IronKey business. Today, this has grown to sit closer to the 25 per cent overall revenue range, Muir said.

“What attracted us to IronKey was that as opposed to being just a USB flash memory company, we found IronKey was more of a security company that took their solution and put it into a USB key,” Muir explained. “There have been lots of stories in the press with lost USB devices and data’s that not protected. In the last six months, we’ve seen more growth with the IronKey products than we’ve seen in the previous 12 (months).”

The IronKey solutions portfolio includes multifunction security devices, which store and protect user data, Trusted Virtual Computing, which enables businesses to have secure portable virtualization even if a network connection is lost, or bandwidth is limited, Enterprise Management Service, which allows users to centrally and remotely manage policies for how a drive is configured and used, Strong Authentication, and Trusted Access for Banking, which enables secure financial institution payments of funds transfers.

Now, with millions of dollars of funding, IronKey is looking to “build stronger alliances with strategic partners who lead in the virtualization, storage or security space,” Mitchell explained. The company is also looking for additional infrastructure providers that can add value around the IronKey solution, she added. “We’re expanding out solutions by applying key applications onto the IronKey platform and we’re also helping to accelerate the adoption of Trusted Access, which allows organizations to safely conduct funding transactions online,” she said. “The other investment we’re making with our new financing will be towards expansion into new markets through partnerships and field coverage.”

“IronKey’s done a great job in supporting its partners and providing brand recognition in Canada,” Muir said. “For partners, there’s recurring revenue with IronKey because if an end-user wants to manage those (USB) keys, partners can fulfill that initial order and they can also receive recurring revenue year over year by renewing services for those customers.”

The IronKey solutions are designed to work as complementary security solutions within an organization, rather than serving as security replacement products, Mitchell said.

“This is not about replacing security,” Mitchell said. “The IronKey solutions are complementary and work well with security solutions like endpoint protection, data protection and encryption protection.”

In North America, Mitchell said IronKey has about 50 Elite solution provider partners, nine Elite National partners and over 200 Authorized partners.

“We’re not looking to recruit 2,000 partners,” she said. “We’re being strategic in the types of distributors we want to work with and the partners we want to recruit. I’d like to have at least two to three major go-to partners per major metro.”

Through the company’s Elite Partner Program, partners receive access to sales and technical training opportunities, lead generation, online portals, campaigns, and more. Partners can also receive anywhere between 10 and 12 per cent margins on IronKey solutions, with the opportunity to earn more revenue through providing services, Mitchell said.

The company has a “big presence” in vertical sectors including the federal government, financial and healthcare, and really, any vertical where there’s a need for data protection for mobile workers, Mitchell said.

Follow Maxine Cheung on Twitter: @MaxineCheungCDN.

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Maxine Cheung
Maxine Cheung
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