Falanx Group Ltd (LON:FLX) Chief Technology Officer Richard Morrell caught up with DirectorsTalk for an exclusive interview to discuss the driving factors for joining Falanx, competition in the marketplace and where he sees the growth for MidGARD
Q1: Richard, what are the drivers for you to join Falanx Group given your security background and your current CTO role at Gartner Inc?
A1: I’ve spent the best part of 20 years in the open source community and what we call the open source industry now. Prior to Gartner, I was Head of Security Strategy at Red Hat for nearly 7 years and while they’re very much exposed to the growing burgeoning needs of many enterprise organisations to burst out from their traditional network environment to other environments such as cloud service providers and outsourced IT providing, in fact software as a service.
One of the major problems that I would come across on an almost daily or weekly basis, never mind the territory I was in, was the fact that all of these hosts, these physical hosts in your network environment and in your architecture, all of them produce massive amounts of ever-changing data. That data, that output data, requires, or I always thought, required some form of ‘sleeping policemen’ if you will, a device or a service that would sit on your network. This would give you a fighting chance of finding the trending information on your platform to give you the ability to react against threat or to react against an emerging zero-day exploit or potentially insider threat on your network, if you’re looking at the data that’s coming off the hosts and the applications that you’re running, at least you have a fighting chance of being able to remediate fast.
With many organisations that we were dealing with at Red Hat, and also at Gartner, you spent tens of millions of dollars or pounds building that customer facing organisation for example and you might spend £1-2 million on your IT infrastructure. As we saw with many companies, including TalkTalk Telecom Group, reputation is all that you’ve got and when you have a potential outage or a leakage of information, especially where it’s personal private data which could include credit cards or the like, customers tend to leave by the front door, you tend to get churn and they don’t tend to come back. The cost of trying to grab those customers back hits you in the bottom line, it hits you in the share price and the shareholder confidence.
Falanx Group, when I sat down with them in February this year, I sat down with a guy called Jay Abbott and very much when I looked at the architecture that he was designing, he’d taken a completely utterly left-field approach to understanding how you orchestrate and enrich data sources. I had to do a double take and it’s very rare when you’ve spent the time that I’ve spent working in organisations such as Gartner, such as Red Hat, to meet someone who can both complete your sentences but also who can catch you blind with a very unique way of trying to solve a very difficult problem.
The driver very much was that he’s a guy that’s got a technology, who doesn’t necessarily have all the answers, but what he does have is a feature-driven stack which no one else in the market has got and my concern at that point was then how do I marshall this guy’s talents into a way that I can make money out of it.
I’m very very blessed that now having met the rest of the team that Falanx Group have got, it’s almost like when you meet the Beatles. They’ve got some very very capable young individuals and also very capable, what I would call ethical hackers there, who understand the pressures and the drivers and issues that many see CSO’s and many Network Operation Managers and organisations face on a daily basis. It enables to tell a story with a full quiver of arrows on my back rather than having to try and find the pieces to tell the story, it’s a comfort blanket if you will and I feel very comfortable joining an organisation where I know that I can help them tell that story and carry that message to market.
Q2: So, what is the opportunity and what are the competition like in the marketplace for Falanx Group?
A2: It’s strange because if you look at how major organisations take this problem, they generally work with a system-integrator partner, they would with a CGI or a Capgemini or a British Telecom or one of those organisations. They will essentially pipe the information from their network switches and their hosts into their managed platform and they will pay huge amounts of money for that privilege, absolutely huge amounts of money for that privilege, but if you look at what the service providers’ doing, the service provider, all of them are trying to do the same thing with about 80% of the common functionality. So, they’ve probably got some Splunk in there, they’ve got a proprietary database in there, they’ve got maybe some Carbon Black or some other endpoint protection software in there and then the rest of it is all their commercial smoke and mirrors.
The cost of doing that for many organisations can be £1.5-3 million a year, this is not peanut money, this is serious wedge but the problem is, for small to medium enterprises and for companies with maybe 400, 500, 600 employees and a couple of locations, that’s more than the entire IT budget. All the IT Managers and all the CSO’s and CIO’s all trying to solve the same problem which is we want to understand what is going on in our network, we want to understand what’s going on on our platforms and we want to reduce the liability we have as an organisation.
So, the competition out there is really hard to peg because there really isn’t much, when I sat down and looked at the competing products from Cisco, from F5, from Fortinet, there’s really nothing. What they have is they have enablers, pieces of technology that fit in that stack. What Falanx Group have done is they have taken a very open source approach by using proven scalable components that are used by the likes of Google and LinkedIn, US National Security Agency etc. to build a combination of tools and technologies that scale without having to have the proprietary cost contained within that stack which you would normally get from a service provider/integrator partner.
So, by cutting out the ownership costs of that Splunk technology, that proprietary database, the underlying hardware, they’re coming in with a value proposition which doesn’t stack up to any competing product in the marketplace. There’s nothing, you can’t go on to the floor of an RSA conference and buy the equivalent of what Falanx Group are selling as a service because no one has invented it yet and that’s the great thing for me, that’s the attraction for me when I start thinking how this stacks up in the marketplace. It’s got a huge value add because it makes common perfect sense to so many stakeholders within the businesses that they’re talking to.
Q3: Where do you see the growth for the service as it ramps up?
A3: So, we’re seeing a huge amount of customers who are deciding that they just haven’t got the money to go and build out data centres, more and more customers are spooling out to multiple cloud instances. So, I did a survey with IDC, Gary Chen did a survey for me at Red Hat about 2 years ago, and we asked customers how many clouds they had, as a rule of thumb in the cloud department at Red Hat, globally we thought maybe 2 or 3 customers. What we found is that the majority of customers had between 4 and 7 clouds so maybe a sales force instance, maybe people going out to Amazon with credit card, Google, Rackspace, whatever and all those disparate types of environment are all pressures on the CIO or the IT Manager to be able put his governance and his controls and his security mandates around.
With things like GDPR coming along, the onus is on the organisation to make sure that their data privacy is correct but also, and everywhere, that they can prove what’s going on with both the data that’s in play that’s running on encrypt across the cloud but also how they’re provisioning those applications and the life cycle of those applications in cloud. I think there’s a real opportunity to start being able to act very much as this marshalling service, to be able to tell a comprehensive story to the marketplace.
There’s another bigger picture and that is that I’ve been working with service providers such as Eurotech in Italy and with Siemens and with Philips and with General Electric who are all providing vectors around internet of things (IoT). They’re producing manufacturing devices, at scale, for service provider partners across multiple global industries so ranging from domestic electric supply for smart metres into hydroelectric plants and the list goes on.
One of the things that MidGARD does from Falanx Group is it enables you to start thinking about taking a step back as a service provider and removing away your fixed costs of servicing devices in the field and reducing your liability for being able to understand what those devices are doing in the field especially if they are in a ‘not always on’ configuration. You don’t want to have to send 50 service engineers to go and replace 1,800 devices, the cost is absolutely astronomic but also you don’t want to have theft of service, you don’t want to be in a situation where IoT devices potentially taken over by a botnet such as we saw with Mirai.
MidGARD has the potential because of its ability to deal with massive amounts of throughput to analyse and to bring in a very service-orientated architecture to allow almost to have a SOC-type environment, a Security Operation Centre type environment, for both device service and platform. There is such huge demand in the marketplace because what you’re essentially doing is you’re selling assurance, you’re selling the ability for an organisation to have a rationale around its fixed overheads because if they’re having to plan 3-4 years ahead for devices that potentially going to be out in the field for 5-10 years then MidGARD gives them a fighting chance of actually retaining their profitability and also being commercial. So, that’s a very very different service offering that MidGARD can play in and it’s very much akin to the sort of activities we would expect to see as IoT matures.
