ANAHEIM, Calif.—After two difficult years that saw a curtailment in U.S. government and even state funding due to the federal budget sequester and an overall tight fiscal environment, those headwinds appear to be dissipating in 2014, according to an executive with identity solutions provider MorphoTrak.
“For government markets one word we’re not hearing this year is sequestration, and that had a profound effect on U.S. government markets in 2012 and 2013, and in state and local markets too because a lot of that is fueled by federal funding,” Clark Nelson, senior vice president of Sales and Marketing for MorphoTrak told HSR at the company’s Engineering Center here. “We didn’t lose contracts, they were just delayed. It was a very tough environment. We’re not feeling or seeing that this year the way we were.”
MorphoTrak, a biometrics technology and solutions provider, is one of three legs of the security segment of
Safran Group. The company’s “bread and butter” market is with state and local governments, primarily serving law enforcement agencies by providing its Automated Fingerprint Identification System (AFIS) biometric database and matching capability.
MorphoTrak’s AFIS system is deployed to 29 states, the District of Columbia, and more than 30 large cities and counties. The company’s primary competitors here are NEC and the Cogent business unit of 3M Corp. [MMM]. These state and local markets account for between 60 to 70 percent of MorphoTrak’s sales, Nelson said.
The challenge going forward in the state and local law enforcement market is “feeding new products and technologies and to offer new business models such as service to help them deal with the economic situation and make it easier for clients to get our technologies,” Nelson said.
Maj. Tim McGrail, commander of the Technical Services Bureau of the Missouri State Highway Patrol and a MorphoTrak customer for AFIS and other systems, said that federal funding his agency uses for law enforcement technologies like AFIS is becoming available again in 2014, which should make it easier to expand capabilities.
Nelson and McGrail were part of a media briefing organized by Safran.
While the AFIS business for state and local law enforcement is the foundation for MorphoTrak, Nelson said the company is seeing increasing interest for biometric solutions related to the ongoing immigration reform debate in the U.S. and as part of an exit system to verify foreign nationals have departed the country.
In February Customs and Border Protection began a market survey of multimodal biometric solutions for use at land border exit points (HSR, Feb. 25). Nelson said that basically the government is trying to figure out technologies are available and what is cost effective. Additionally, CBP and the Department of Homeland Security Science and Technology branch plan to conduct tests this year and next of biometric exit solutions for use at the nation’s airports.
Like other companies in the biometric solutions space, Nelson said that Congress has provided MorphoTrak with plenty of opportunities to discuss the latest technologies that are currently available and how they can be used.
Beyond the state and local markets, MorphoTrak has helped the FBI upgrade its original AFIS system with the Next Generation Identification system, and is providing its access control solutions to commercial customers for use in airports and seaports and for other industries. Nelson said that more than 40 airports are using MorphoTrak’s biometric-enabled smart card readers for access control to secure areas and that the company has also been selling readers to seaport customers in anticipation of requirements under the Transportation Worker Identification Credential (TWIC) program.
The Coast Guard was expected to issue a final TWIC reader rule this month but that announcement has slipped until later this year. Once the reader rule is issued, industry officials believe that will further open demand from seaports for TWIC readers to help authenticate TWIC cards and tighten access to secure areas.
MorphoTrak is also seeing increased interest from state and local governments for biometric solutions for civil identity management and fraud prevention. The company hasn’t won new business here of late but does have long-term contracts with departments in Arizona, California and New Jersey.
There is “pent up demand” for biometrics solutions in a number of markets, Nelson said.