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TMCNet:  Cybersecurity: The Most Profitable Sector of 2017

[July 12, 2017]

Cybersecurity: The Most Profitable Sector of 2017

LONDON, July 12, 2017 /PRNewswire/ --

Businesses all over the globe are under a massive assault from hackers on a scale never witnessed before in the Digital Age. And smart investors are finding profits in the companies battling them watching PureFunds ISE Cybersecurity ETF (NYSE: HACK), Raytheon Company (NYSE: RTN), Rapid7, Inc. (NASDAQ: RPD), SecureWorks Corp. (NASDAQ: SCWX), Pure Storage, Inc. (NYSE: PSTG)

Hackers are now running organized cartels in the so-called 'dark web' where they combine efforts and launch targeted and well-coordinated attacks.

The severity of the problem has reached epic proportions, and no one is safe.

  • Your emails can be hacked by a 12 year old.
  • One billion user accounts by Internet pioneer Yahoo! were breached last year, allowing Verizon to knock off $350 million from its purchase price.
  • Leading tech companies Google and Facebook recently fell victim to a hacker, and ended up wiring him a cool $100 million.
  • Just last week, cyber criminals sent global shipping into a major panic, hijacking the systems of shipping giant Maersk in the biggest-ever attack on the industry. No goods could be delivered, and Maersk, which controls 18 percent of all container trade, couldn't find its cargoes.
  • Extortionist hackers are demanding bitcoin ransoms to release kidnapped data, and they've hit 2,000 companies so far. Some 30 multinational companies have paid up.

Make no mistake about it: there is an all-out war going on right now between data thieves and info security warriors.

For the warriors, it's a market like no other. For the investor, it's a $200-billion-plus opportunity over the next couple of years.

This is one of the hottest sectors right now, with eager investors pumping $3.5 billion into 400-plus cybersecurity startups in 2016 alone. This market is expected to reach $170 billion by 2020, according to the Steven Morgan Cybersecurity Industry Outlook. That's a 4,750 percent increase.

Securing email is a big part of that. And one little-known company just hit the scene with the e-mail of the future.

The solution is simple and elegant, yet highly-effective - a 2-minute email install solution that is poised to win the lion's share of the profits in the near-future.

The company is California-based Identillect Technologies Corp. (ID; IDTLF) and it's ready to storm this war zone with the first solution that fights back against hackers with the push of a button.

Identillect Corp. offers a solution that can be used as a plugin on virtually all devices and operating systems, and on mobile-optimized web portals.

With Identillect now approaching 40,000 subscribers and enjoying amazing 70 percent margins, low churn and phenomenal subscriber growth, this 10-cents-a-share company is a low-entry point into the massive market. And it could be the fastest path to outside gains for investors who get to the front line of this cyber war first.

These guys are at least three steps ahead of the competition, and are poised to become an attractive acquisition target.

Here are 5 reasons you should keep an eye on Identillect Technologies Corp. (ID; IDTLF):

#1: Plug-in Profits

Identillect Corp offers Delivery Trust, a plugin that redefines email encryption and decryption. You don't have to download cumbersome software anymore, or become a locked-in member of a network along with everyone that you send emails too. Encryption will no longer mean taking 10 minutes to open a single email.

Identillect has set the bar really high: you can access your email in three seconds flat! Yeah, that's right, three seconds, period.

Your emails are secured instantly with the click of a button, ensuring 100 percent safety while in transit.

And there are many more security features on top of this. That includes the extraordinary ability to retract a message sent to the wrong person, without a trace-even if it's already been opened, and even 2 years after the fact.

More importantly, the plugin is built around a patented technology that fully complies with all national and international data handling regulations.

And Delivery Trust is a unique white-label business model. It works equally well in Outlook Plugin, O365, Outlook.com, Hotmail.com, Gmail Plugin. It's also available as a mobile app that works on iPhone, Android, Windows and other mobile operating systems.

This is elegant simplicity and low-cost at its best.

Microsoft's Office 365 Ajure, Google, Citrix, Aproofpoint, and Zix, they all have their proprietary systems. But they take a month to implement. They're expensive, cumbersome and complicated to use. Many small�and medium businesses lack the technical know-how or the personnel to install email protection tools at scale.

Delivery Trust installation is so easy, virtually anyone can do it. And it accomplishes the same thing in 2 minutes. Even better, your email recipients don't have to lift a finger. The system works seamlessly.

It already boasts a 99.4 percent deliverability rate, so it's a little wonder that the company's subscriber base has been growing exponentially.

#2 The Growing Need for Privacy

The need for greater data privacy and security is now more urgent than ever before.

Imagine your personal mail being passed down the street by hand from neighbor to neighbor, without an envelope before it reaches your mailbox.

Your bills, investments, bank statements, IRS letters, personal letters - all are available for anyone to red.

Now, few email users know this scary fact, but it was just recently that Google reported that half of all email is sent in the exact same way! Unencrypted and available to all and sundry!

That's right, your email messages are essentially broadcast. And can be read by anyone along the route.

But that's not even the half of it.

Congress recently handed Donald Trump critical legislation that paves the way to repeal and replace the privacy protection laws that have protected Internet users for a long time.

Internet providers such as Comcast, AT&T and Verizon will now have a leeway to collect your web browsing and app usage data and sell it to third parties if they so wish.

It's a really unsettling thought, but that might be the quid pro quo that we have to learn to live with if we are to survive in this era of rampant terrorism and cybercrime.

And it underscores why we have to stringently safeguard our private data more than ever before.

Companies everywhere have started scrambling for the best possible email security tools as the new laws come into force.

Only the best companies with the most innovative solutions will survive and thrive. So, now Identellect comes in with a great email server that removes our vulnerability and its growth is explosive. That's because it encrypts each piece of information separately.

As the company's wildly sought-after cryptographers put it: "If I breach Dropbox's servers, I can touch everything in there. It doesn't matter that it was used in a secure pathway if it's not encrypted on the other side."

The difference with Identillect is this, and it's a huge difference: With Delivery Trust, every single file is encrypted separately. If someone breaks into your house and all your valuables are in one place, you lose everything. But with Delivery Trust, you've got everything in a different safe.

#3 Explosive Growth and Recurring Revenue Model

Identillect Technologies Corp. (ID; IDTLF) customer base has increased 880 percent since commercialization in April 2015. That's a nearly nine-fold increase in little over two years.

The company is firmly on the path to profitability, and expects to hit breakeven point once its subscriber base reaches 35,000 sometime during the fourth quarter of 2017.

The company has been able to achieve this phenomenal growth by creating a vast network of resellers across the globe.

The beauty of it all is that the company operates a highly lucrative SaaS (Software-as-a-Service) recurring revenue model. This means that its revenue and profits grow in tandem with its customer base.

Churn has consistently remained below 5 percent, a clear sign that customers are happy with the product.

Overall profit margins are now approaching 70 percent, which demonstrates the company's pricing power and leadership in its niche category.

#4 Regulatory Compliance

With the ongoing seismic shifts in the online world, cyber liability insurance is no longer a luxury item but a must-have for all businesses with an online presence. If your company stores or sends any unencrypted data and it ends up getting stolen, most insurance companies will deny you any claims, citing your failure to put reasonable security measures to protect your data.

Today, security breaches are one of the leading legal issues that face many C-level executives, with Bloomberg estimating that the cost of a single breach now exceeds $7 million.

That's why the European Union has enacted tough legislation for regional members to help counter this growing menace.

What's particularly intriguing is how heavy the fines are -�company's risk being fined as much as 4 percent of total annual revenue if violation occurs. It's by far the most rigorous cybersecurity law passed to date. Other regions including the U.S., Canada and Asia have followed suit.

#5: Dream Team with World-Class Cryptographers

In today's computer-centric world, staying a step ahead of cybercriminals with a full head of steam is a tough task. You need a world-class team of programmers and cryptographers who are sharp as a tack as well as a top management team with the requisite industry expertise.

Unfortunately, the crop of available cryptographers is extremely thin. There are only 250 PhD-holding cryptographers in all North America. And 2 of them are behind Identillect Corp. That puts the company ahead of the competition and keeps it there.

The company's CTO, Einar Mykletun, is one of these. He holds a Ph.D. in computer science with a focus on applied cryptography. He is the company's security expert specializing in risk analysis and cryptographic solutions. He also lectures and is published internationally on cryptography.

Company chairman Jeff Durno has served as Director in several TSX-V-listed tech companies while CEO Todd Sexton is a data security and regulatory compliance expert who played a central role in the development of the company's flagship product, Delivery Trust.

Big Announcement Coming

Identillect Technologies Corp. (ID; IDTLF) is currently in an exponential growth phase, and its subscriber base continues expanding at an ever-increasing clip. As the company continues to expand its footprint, it's beginning to target bigger customers which mean even more growth ahead.

Remember that this business is just getting started. Just two years ago, the penetration of email security products in the market was a mere 2.5% now it's approaching 10% and still growing. Breaches involving email are the second largest type of breaches so this is a hyper-growth sector for years to come.

Honorable mentions:

PureFunds ISE Cybersecurity ETF (NYSE: HACK): Hack was created to provide the market with a transparent vehicle to invest in the increasingly important Cybersecurity industry. An increased spending and demand for cybersecurity solutions will benefit the always morphing Cybersecurity Industry and with it this ETF.

Raytheon Company (NYSE: RTN): Raytheon Company is an emerging tech company specializing in defense and other government markets. Raytheon's major selling point is its strong command of cybersecurity. While its specialty is in government-centric markets, Raytheon also develops products, services, and solutions in various other markets.

Rapid7 Inc (NASDAQ: RPD): Rapid7, Inc is a huge player in security and information technologies. The company's special, analytics-driven approach to cybersecurity and IT operations give it an incredible advantage over its competitors. The company's in-depth knowledge of the threats facing businesses' physical, virtual, and cloud-based assets allow for high quality service which puts Rapid7, Inc ahead in the field.

Secureworks Corp (NASDAQ: SCWX): Secureworks Corp is a company specializing in intelligence-driven information security solutions. Clients are protected from cyber-attacks including hacking, ransomware, and the like. The company's solutions enable its clients to strengthen their defenses in order to prevent security breaches and detect malicious activity in real time. Secureworks Corp is definitely a great pick for those looking to invest in cybersecurity.

Pure Storage Inc (NYSE: PSTG): Data platforms are also a key asset in protecting companies against cyber-attacks. Pure Storage, Inc is a data platform focused on delivering fast, optimized and cloud-capable solutions for its customers while keeping data security as a top priority. This is another company about which investors can be optimistic.

By James Burgess

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