Because a business can't live on cash alone, Trustwave helps credit card merchants and other businesses process secure transactions. The company's TrustKeeper software is a PCI (payment card industry) compliant application that protects merchants against unauthorized access, fraud, and other security breaches. Its software is sold to companies that process electronic transactions, such as American Express, Banc of America Merchant Services, Chase Paymentech, Discover, Visa, and Wells Fargo, among others. These partners, in turn, offer TrustKeeper subscriptions at credit card merchant locations, mainly in the US and Canada. The company also tailors applications for such industries as health care and hospitality.
The company is focused on extending the market for its TrustKeeper software, which is delivered under the Software-as-a-Service model, hence the subscriptions. (SaaS is centrally-hosted, meaning customers don't buy the software outright and install it on their own computers, and Trustwave generates recurring revenues through subscription renewals). The company generates about three-quarters of its revenue from software subscriptions; the other 25% is made up of services and products. It product selection was built largely from recent acquisitions. While the company has customers in about 60 countries, most of its business is done in North America.
Trustwave has acquired several companies in the past few years. In 2008 it bought ControlPath and integrated its governance, risk management and compliance (GRC) software into its managed security services. The next year it picked up Mirage Networks, a provider of network access control technology that prevents devices from entering insecure networks, and Vericept, whose data loss prevention (DLP) tools help identify and protect intellectual property and sensitive customer data.
In 2010 Trustwave made three purchases -- BitArmor Systems, Intellitactics, and Breach Security. BitArmor Systems' Smart Tag technology provides data encryption as an added layer of security; Smart Tag was incorporated into Trustwave's DLP and endpoint security technology. Intellitactics' Security Information and Event Management (SIEM) technology collects, analyzes, and stores events logged in networks and databases, and Breach Security offers a Web application firewall to protect e-commerce sites against attacks.
In 2012 Trustwave bought Web security company M86 Security. The purchase expanded the company's capabilities in email protection, anti-malware technologies, and other Internet security products and technologies and added M86's 25,000 customers.
Also that year the company introduced managed security services, including a subscription-based service called the SpiderLabs Threat Intelligence Program, which is designed to give organizations the tools and intelligence they need to protect themselves from cyber security threats and data loss based on Trustwave's research and analysis.
To extend the reach of its sofware in Europe, in 2012 the company formed an agreement with London-based Vigil Software to distribute its products in the UK and Ireland.
While the company is not profitable and has recorded a net loss for the past five years, its revenues essentially doubled between 2008 and 2010. The stakes continue to rise in data security and compliance as the credit card industry updates its security measures, and the security software industry is evolving rapidly to thwart new threats and employ new technology. Trustwave believes its revenue will increase in the near term as it benefits from demand for data security compliance. Much of its debt was accumulated from its acquisitions, which it is betting will contribute to long-term growth.
Trustwave filed for an IPO in 2011, but postponed the public offering soon afterward, citing unfavorable market conditions. – less