Kerosene 2.0

The alchemists of yore believed in making gold by combining the four elements in some way and, perhaps, whispering incantations over the brew. Today, companies are able to produce gold from the Internet, an entirely virtual space consisting of electrons chasing around various channels. While Google and Facebook guide and organise the travellers into advertising-friendly groups, Carlos Moreira and his company Wisekey are giving out birth certificates.

The question is provocative. What is the world’s third largest country? Swiss Style is preparing a Latin American special, so I know it is not Brazil. Carlos Moreira has just stepped off a plane, he has two hours of sleep behind him, but the glint in his eye suggests that this is a trick question, like “How many angels can dance on the head of a pin?” He spares me embarrassment by saying “Facebook”. Over 500 million people live in that virtual space that depends not on oxygen, but rather on electricity and hundreds of whirring servers. There, individuals interact, create their own little catwalks, share joys and barbs, itemize what they had for breakfast in public, and keep the cradle-to-grave entertainment going by playing virtual games.

And they do two other important things. The first is to attract truckloads of advertising income for founder Mark Zuckerberg and his company. The second, for a man as security-conscious as Moreira, is a little more pernicious: “Facebook is just a smart way of collecting personal identification information on the users,” he points out with a whiff of sarcasm in his voice. “Organisations searching private information on people are very happy about this because they don’t have to go out of their way to build up their own database, they just search on Facebook.”

But it is going to end, Moreira believes. The fact is, our society demands something disruptive every few months, otherwise a risky boredom might set in and the electronic denizen could become restless. The current system can be tweaked, but for real change to take place will require ending legacy identification, like pin codes, paper IDs and passwords. Today the focus is on digital IDs for people and objects, and that is exactly what Moreira envisioned twelve years ago when he founded Wisekey. It is positioned to head what might best be called a “comm-volution”.

Evolutionary steps

Wisekey began its upward trajectory almost in the ruins of what was called the New (dot-com) Economy. Its portfolio included the somewhat vaguely defined ID management and security. A Wisekey ID is in fact an X.509 standard-based encrypted digital certificate containing personal identification information, or PII (Personal Identifiable Information). This is owned only by the user, as it were, and should never be made public. What the content and service providers actually “see” is a profile or credential, but never the PII part of the identity. “It was visionary work at the beginning,” he recalls, “because people were wondering why you needed that level of security and segregation”. Indeed, surfers did not buy that much or expose so much data on the Internet eleven years ago. Later there was Paypal, but as Moreira points out, that was boosted by Ebay and furthermore it is “just a layer on top of the credit card infrastructure, which does not solve the problem of your ID”. If the user loses his credit, he will also lose the ID, which belongs to the provider and not the user. So the Wisekey was created as a kind of “birth certificate” for the Internet, one that gives you IP portability for an ubiquitous web access, whether you are among the haves or the have-absolutely-nots.

Moreira did not plan to grow fast. Astonishing for someone who seems to live with one foot in a plane and the other on slippery ground. He remarks on this “Swiss” quality of his strategy. He took the long view and slowly built up a reputation and a following. One real coup for the company came in 2002, when he became a member of a steering committee to contribute to developing an e-voting project for Geneva, Switzerland, with Wisekey becoming the technological leader. The project was implemented a year later with success and turned out to be a world premiere.

Digital connecting

Moreira’s vision extended beyond just glorified passwords and secure access. “The centre of gravity of the Internet is shifting, it was on ‘search’ for many years and Google became huge, then it shifted to social networking,” he points out easily. “Now it’s shifting to digital IDs and that is where a company like Wisekey will become huge!” It is not just hyperbole from a man who speaks easily in millions and billions: The World Economic Forum appointed the company as Global Growth Company (GGC), which means it has the potential to become tomorrow’s industry leader and a driving force of economic and social change.

What does this look like in reality? Wisekey is realising a project with leading sports support clubs, which has no fewer than 500 million fans combined. A total of 80 million of them are already on their Facebook page, and another 17 million are digitally and diligently following their idols on other pages. None but Facebook are earning from the great mass of people, however. So sport franchises are now giving away Wisekey IDs that allow the fans to access content and adding a service or content to that. The IDs are monetised through advertisers, which is where Wisekey and the club earn their money at USD 3 to 17 per user. As for the fans, they get an ID and a free app allowing them to access premium content, like a match. This would normally cost, but if they are willing to look at, or listen to, an ad, they get it for free. “Monetising eyeballs,” he calls this.

Another country

A second game changer emerged that enhanced the need for a distinct userfocused ID key, namely the rapid evolution of “The Cloud,” that strange, labyrinthine, amorphous world of cloud computing with multiple entry points, from television sets and PCs, to a wide range of handheld devices. The Cloud is the repository of all sorts of shared services and applications, but they can only be found and used given a clear ID. The person without that ID will stay on the outside looking in like the Savages in Brave New World.

Moreira aims to change all that and his focus is on Portuguese and Spanish speakers in general and Latin America in particular, an “ecosystem” involving about 250 million Portuguese speakers and 600 million Spanish speakers for whom nothing has been really done. The Cloud, Moreira notes, is driven by language and by the powerful new computing smartphones. Given an ID, the user can “federate apps according to language, so content and service providers now have a reason to translate their offers into another language, for example, Portuguese”. Getting ahead of the eight ball, Wisekey is already partnering with publishing groups to develop new content in Portuguese. And in a partnership with MIT’s Media Lab, Moreira is making 700 million IDs available for free.

Rio and Brazil, which are gearing up for a sportive double whammy, are both the big prize and the gateway to a large, growing and active market. “You need a reason to download an ID, and that is football,” he says, elaborating on his strategy. “We are issuing a Rio ID that allows users to access all existing services in Rio and to receive premium content during FIFA 2014 and Olympics 2016.” This, in turn, will loyalise the user community and create a trusted social network ecosytem amongst fans.

The outcome will be both virtual and real. On the one hand, the apps economy will continue to grow incrementally but on a thematic basis. On the other hand, airlines, restaurants, shops and other potential advertisers can get involved and offer special deals enhanced by the Wisekey ID certificate, which offers geo-localisation. The user might then be offered realtime discounts to a restaurant five minutes away. Or if a fan watching a football match in the stadium sees a better seat, he or she can check its availability and pay the surcharge through the mobile phone.

All aboard

A visit to the company’s website reveals that Moreira is involved in a number of projects with a philanthropic bent. “The company of the future will not be judged only by their financial results but by the good they provide,” he explains, “and this is not detrimental to your growth”. At first glance, his products may not seem very appropriate to, say, a family living off Red Cross supplies in Colombia or the DRC. You cannot eat X.509 encryption, nor wear it. But, a Keynesian at heart, he feels it is important to empower even poor people to have access to the market. Of the seven billion phones being used, only one billion are actual consumers, he points out. Thanks to the Wisekey ID, however, there is no longer the old digital divide. Everyone can participate.

And so, in partnership with the Clinton Global Initiative, the company is now giving away one billion IDs with free phones and cloud services. Among the recipients are the world’s millions of migrants, many of whom are far from their native country and require a wide range of services, from health care, to language lessons. With their ID, they can access them and enjoy some advertising, which in turn will supply the system with cash. “To the advertiser,” says Carlos Moreira, “an eyeball is an eyeball”.

Technology, of course, is not standing still. Wisekey is also securing the luxury companies with its brand protection technology associating digital IDs with objects. Several leading brands such as Dior and Hublot are already using this technology for their luxury watches. One of the next steps is Near Field Communication (NFC), which will allow even greater flexibility in mobile payments, letting Moreira muse on the idea of buying a banking license for Wisekey. And given rising economic tides, at some time even the formerly penurious users will begin buying services or goods, thus completing transactions with their phones. The model is reminiscent of the kerosene lamps distributed by John D. Rockefeller. The lamp was a gift, the kerosene cost, but the light it gave off also allowed for longer working hours. In five years, Moreira sees up to eight billion phones being used, with four billion consumers. And all those connected to the grid will have the opportunity to earn in some way, to be part of this huge ecosystem. “Digital IDs are the molecules,” he ref lects, “the Internet is the brain”. So that is where it went.

A straight-line career

Carlos Moreira CEO & Founder, WISeKey

Carlos Moreira, born in 1958, hails from Cadiz, Spain and he is now Swiss citizen. After completing an MBA, he went to work for the UN and other agencies, including the European Free Trade Association, International Labour Office, International Trade Center and UNCTAD. His work involved security and consultation on new technologies mainly in Geneva, Switzerland.

He then went to the Melbourne Institute of Technology for three years joining as Adjunct Professor to lead a research lab on e-commerce and digital security. In 1999, he ploughed all his experience and knowledge into founding Wisekey, avoiding the pitfalls of venture capital by associating with other companies and using mainly his own capital to start the company with other backers including UBS.

Article by Marton Radkai