iPass acquisition shores up wireless security

iPass is putting an emphasis on security with a new acquisition, announced as it reported slightly higher earnings for its third quarter.

The global wireless internet service provider said yesterday it will buy California-based Mobile Automation for $20m in cash.

Mobile Automation, which saw revenues of $4m over the last year, creates web-based services that simplify patch management for IT departments on computers and mobile devices such as PDAs. The technology will be integrated into iPass' services and will help organisations to enforce security policies on its devices without first connecting to the corporate network.

iPass CEO Ken Denman said in a statement: "Mobile computers and PDAs are the weakest links in the enterprise security chain."

iPass services based on Mobile Automation technology will be available this quarter.

For the third quarter of 2004, iPass's revenue grew 20 per cent from last year to $41.9m and net income increased 38 per cent to $6.2m from the same quarter in 2003.

iPass ended the quarter with $162m cash on hand. It now has 526,000 customers who use its 13,500 broadband access points in 43 countries.

The company predicts for the fourth quarter a 2 to 4 per cent quarter-on-quarter rise in sales and earnings per share of 6 cents.

Along with the Mobile Automation acquisition, significant third-quarter deals include the purchase in September of New York-based Safe3w, creator of technology that allows fingerprints to identify users on devices; an extension of a deal to integrate Sygate Secure Enterprise with iPass services; and an arrangement for US Department of Defense organisations to purchase iPass services under a blanket agreement.

Wireless service providers such as iPass would do well to simplify their pricing policies and push monthly subscriptions, according to new research from consultancy BroadGroup. The trend to charge by the hour or day often confuses customers, the consultancy's survey of service providers found. BroadGroup also notes that Wi-Fi prices continue to be more expensive in Europe than in the US and Asia.

The number of wireless hotspots worldwide is expected to grow to 135,000 by 2007 while revenues in the market will "increase dramatically" by that year, says telecoms newsletter publisher Baskerville.