R&D spending and commitment to innovation fuel growth for Ontario tech firm

Bringing disk encryption into today's mobile world

October 27, 2011— Mississauga, Ontario

WinMagic Inc.

WinMagic Inc., a Mississauga-based company, is a great example of how a sustained relationship with the National Research Council of Canada’s Industrial Research Assistance Program (NRC-IRAP) can support a firm’s continued growth.

Thi Nguyen-Huu and his wife, Sylvia, originally from Vietnam, founded WinMagic in 1997 as a six-person company. For the past decade, NRC-IRAP Industrial Technology Advisor (ITA) John Dransfield has been involved with WinMagic, working closely with Garry McCracken, Vice-President Technology Partnerships, to help target the firm’s resources and maximize opportunities.

Reinvesting for growth

What sets WinMagic apart from many in the tech field is its comparatively heavy investment in research and development (R&D): 20% of gross revenues. The strategy seems to be paying off, as the company is steadily increasing in size, continuing to hire, and has plans for more innovation. It has already sold more than three million software licenses worldwide, with 70% of its market outside of Canada.

Since 2008, Dransfield has been working with WinMagic on a product known as the Next-Generation SecureDoc Enterprise Server (SES). Market knowledge and strategic intelligence provided by Dransfield and NRC-IRAP have enabled WinMagic to expand its market significantly by adapting its product offering to the evolving needs of a growing market segment.

Laptop running WinMagic’s SecureDoc

Laptop running WinMagic’s SecureDoc

In WinMagic’s early days, disk encryption was only run on single computers and by a select group of users. But over the years, the need for encryption spread from secret to general government agencies and out to more and more users. Eventually, organizations needed a way to manage encryption centrally, and required more features, such as protection for removable media. As it responded to these needs, WinMagic’s market grew to include financial institutions and the health-care and education sectors.

Scaling up

WinMagic’s flagship product, the Next-Generation SES, was developed to satisfy the growing demand for encryption solutions from the organizations that characterize these sectors. The Next-Generation SES can manage Mac, Linux and Windows machines, says McCracken, and handle a client’s entire collection of protective devices. “Their central consoles also address an important industry trend—moving from software to hardware encryption in the form of self-encrypting hard drives.”

Dransfield was instrumental in helping the firm build the SES, says McCracken. “John helped us frame our project, articulate the technical objectives, and focus our limited resources on the market segment that was going to give us the biggest bang for the buck. That allowed us to scale up our solution from dozens or hundreds in an installation to tens of thousands.”

McCracken also says Dransfield is the firm’s “eyes and ears” in terms of networking opportunities. Dransfield agrees that his most significant contributions to WinMagic’s success relate to his dedication to networking, always with an eye on global opportunities—part of the reason why just 30% of WinMagic’s business is in Canada.

For example, Dransfield informed WinMagic that the Canadian Consulate General was encouraging firms to participate in the annual US Air Force IT Conference & Expo in 2009. WinMagic attended the conference, and was able to establish additional contacts and make profitable connections to the US federal sector, one of the world’s largest users of information technology products.

Committing to innovation

WinMagic’s commitment to innovation and determination to reinvest in itself has helped it survive in an industry that has seen virtually all of its competitors gobbled up by big anti-virus firms like Symantec and McAfee. WinMagic now boasts a number of prominent customers, including the US Department of Homeland Security, other US government departments, and various Canadian government departments. WinMagic’s investment in R&D has remained steady over the past two years.

In fact, since the firm began working with NRC-IRAP on its Next-Generation SES:

  • Overall sales have increased by 16%, despite a strengthening Canadian dollar;
  • The company has created 10 new jobs, and now employs approximately 100 people, most of whom are software engineers.

Looking to the future, Nguyen-Huu sees growth through continued product development, strategic partnerships and NRC-IRAP support.

Enquiries: Media relations


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