Shareholders bring down axe on Baltimore

[R. A. Hettinga]

<http://www.zdnet.com.au/printfriendly?AT=2000048600-20281495>


ZDnet

Shareholders bring down axe on Baltimore

December 01, 2003
URL:
http://www.zdnet.com.au/newstech/security/story/0,2000048600,20281495,00.htm

Baltimore shareholders on Friday voted overwhelmingly to sell the company's
PKI business, which owns the UniCert software, to be US-based beTrusted.
The sale means that beTrusted, the security services company formed by
PricewaterhouseCoopers, will acquiring Baltimore's 300 PKI customers.

Baltimore is now likely to go into voluntary liquidation, said chief
executive Bijan Khezri, saying that the vote backed up the board's belief
that Baltimore "should not continue operating as a subscale software
infrastructure vendor in a consolidating industry."

The board's objective now, said Khezri, is to minimise the company's
liabilities. It's a far cry from Baltimore's heyday as Ireland's darling of
the dot-com boom, valued at £7 billion -- more than the Bank of Ireland's
valuation at the time. Baltimore is now left with hardware and software
support services, which it has said it plans to dispose of shortly, and an
estimated £25 million in cash.

"The options available to Baltimore going forward are principally
threefold: returning cash to shareholders, a reverse takeover or an
acquisition," said Khezri. "In the Board's view, together with its
advisors, the return of cash to shareholders can best be achieved by way of
voluntary liquidation."

The sale marks the end of Baltimore as a security software company, in
which capacity it struggled to sell the complicated and expensive concept
of PKI. A public key infrastructure is a framework that provides security
services to an organisation using public-key cryptography. These services
are managed using certificates that are issued from a central certificate
authority. Friday's sale embodies the general failure of PKI technology to
match the hype that it generated over the past few years, say analysts.

"The promise of PKI hasn't happened," said Ovum principal analyst Graham
Titterington. "And I don't think it will. It is expensive and costly to
implement. Businesses have felt it is just not worth the expense. The whole
thing turned out to be pie in the sky."

James Governor, principal analyst at RedMonk, said Baltimore's mistake was
to bet the house on PKI. "It is also difficult to sell a portfolio that has
a lot of different pieces related by a theme, and you're trying to tie them
together," said Governor, referring to Baltimore's attempt a year ago to
package up its PKI technologies.
-- 
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R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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