What Is Going On With The Biometrics Market?

Something strange is happening in the biometrics industry. Despite the flailing economy and a common public misperception of the use of biometric data, vendors of this technology are actually selling products. And I don't mean these companies are just getting by - they are actually realizing sales jumps. For example, Martin Huddart, general manager of hand geometry vendor Recognition Systems (Campbell, CA) said his company's sales are up this year as compared to 2000. Iridian Technologies, a manufacturer of iris recognition products, hasn't seen a dramatic sales jump this year, but sales haven't decreased either. That's not too shabby considering Iridian experienced a 400% sales increase in 2000. Even companies like Control Module (Enfield, CT), that focus on data collection terminals and access control systems, have seen an increased interest in biometrics. "Nowadays, probably 75% of the calls we receive are concerning our fingerprint reader terminals," said Jimmy Bianco, president of Control Module. "These customers are primarily looking to use biometrics to eliminate buddy punching and the overhead and costs related to producing ID cards."

Don't Underestimate The Value Biometrics Can Offer
So, are these three companies experiencing growth while the biometrics industry is really lagging? According to research analysts Frost & Sullivan, the answer is no. In fact, the firm's World Biometric Technologies Markets report indicates the biometric market is expected to reach $900 million in sales by 2006. That's an $834 million increase over last year's $66 million sales mark.

"When you have a slowed economy, a company's risk profile changes," Huddart explained. "They see tried and true biometric solutions as a way to reduce the risk of data loss or employee attendance problems. Therefore, they're willing to make the investment." Bill Voltmer, president and CEO of Iridian Technologies agrees. He said customers are primarily seeking ways to control physical (e.g. unlocking a door) and logical (e.g. computer log on) access. "Companies want a biometric device's price point to be comparable to the thing being protected, such as a computer or a database," stated Voltmer.

Legislation Spurring Biometrics Growth
Some of the markets that have recently embraced biometric technologies include transportation/immigration services, healthcare, government, prisons, and financial services. Much of the latter market's use of the technology has involved secure log on to corporate networks. "This application has been portrayed by analysts as a big growth area for biometrics," Huddart said. "Unfortunately, many of these predictions have come up short. Nevertheless, I still think there are a lot of opportunities in this arena."

Both Huddart and Voltmer mentioned how new privacy legislation has not only helped drive sales for biometrics but will eventually lead to a more positive perception of the technology. The Health Insurance Portability And Accountability Act (HIPPA), the Electronic Signature Act, and various child online protection acts are all examples of this type of legislation.

It Still Comes Down To Privacy, Doesn't It?
But whether mandated by a law or not, a customer's biggest concern about biometrics is always going to be the privacy of this very personal and unique identifier. "Americans are probably more concerned about privacy than any other nation's people," Voltmer said. "With biometrics, the [privacy] issue revolves around how the biometric template is secured and whether or not it can be replicated."

With this in mind, VARs should learn the difference between one-to-one biometric matching systems as compared to one-to-many systems. A one-to-one biometric system uses a combination of a password or ID card with a biometric such as a fingerprint. Authentication (e.g. access being granted) is achieved when the password or ID card info matches the biometric template on file. A one-to-many scenario would simply involve presenting a biometric and receiving authentication based on that data. Huddart feels one-to-many biometric applications are the ones to watch in the future. "As people become users of this technology their fears tend to go away," Huddart said. "The privacy issue is probably more in the press than in the minds of the users."

I think Huddart is right; a lot of the press coverage biometrics receives is negative. For example, an article I read concerning the use of facial recognition technology at the 2000 Super Bowl was entitled "The Snooper Bowl". The article explained how civil liberties organizations were upset about the use of this biometric for identifying known terrorists and criminals in the crowd. However, the article also exposed millions of Americans to one of the possible applications for biometrics. This level of awareness is becoming commonplace, which is strange for such a traditionally low-profile technology. But for a VAR or integrator, that just means customers may begin calling you for biometrics instead of the other way around. Get ready.