Arcot Leads the Pack

To date, 2007 was the most fruitful year since Arcot Systems’ inception. With market growth, new partnerships, and continued enhancements to our product and service offerings, there is much to be excited about.

Momentum in the market
Principally, we have experienced continued growth in the credit card industry. We also saw major growth in financial markets due to a variety of factors, such as: increasing usage of Internet accounts among consumers and business, a security push from agencies such as the FFIEC, and an increasingly loyal and vocal set of partners and users. Through 2008, we expect to see further expansion into insurance, investment banking, and corporate banking markets.

The enterprise market is also showing interest in Arcot solutions. Enterprises have begun querying vendors about how to provide strong authentication for their online portals, SSO applications and remote access. This focus on upgrading username/password authentication with cost-effective strong authentication, paired with Arcot’s product positioning as channel ready, will translate to a number of significant partners selling Arcot software in the enterprise in 2008.

Enhancements to product offerings
Increased product expansion has been spurred by credibility gained through achievement of the Federal Information Processing Standard (FIPS) 140-2, Level 1, the IT security industry’s “gold standard.” In 2007 alone, Arcot has formed key product partnerships with major financial and technology companies, including integration with Adobe Reader and support for Windows CardSpace. Arcot has invested in digital signing and eStatement delivery solutions to support the growing trend of “Green IT”. Significant interest has developed in digital signing to eliminate paper in pharmaceutical and financial sectors. In addition, new applications to eliminate paper statements have been developed and marketed in 2007. We see those markets emerging in 2008.

Major success in industry events
The 2007 Arcot User Conference pronounced Arcot’s presence as the market leader. We were honored to host presentations from representatives of companies such as Adobe, IBM , JPMorgan Chase, MasterCard, Microsoft, Pfizer, Visa and Wells Fargo. We also experienced great success in events such as the Financial Services Conference in NYC, the Gartner Identity & Management Summit, a Windows CardSpace demo at RSA , our very own “Taking the Fraud out of eBanking” Webinar, and others.

Pressing onward into 2008
With increasing expansion into new markets, growing Internet usage and a market increasingly conscious of identity theft and fraud, we expect 2008 to be an even more successful year for Arcot. On behalf of all of the Arcot family, I would like to personally thank our friends, partners and customers for their valuable contributions to Arcot’s success.

Wishing you a peaceful holiday season and continued success in the new year,

Ram Varadarajan
President and CEO
Arcot Systems, Inc.