Netlinkz’s award winning VSN product and deal with Space-X’s Starlink have shows that the company can match it with the best in the world.

Network security teams around the world are facing a rapid rise in very costly and damaging cyber attacks. These are growing in complexity and scale as hackers keep pace with evolving cyber defences.

In Australia, the Optus and Medibank breaches have shown these risks are pervasive and and may have rolling consequences for years. Rising demand from WFH workers is another pervasive threat. Many existing hardware-based remote access services have been crippled.

While employees and their PCs were once safely behind the office firewall, the WFH culture has given hackers a soft new underbelly to attack.

Australian based advanced network security software company, Netlinkz (ASX:NET), resolves this problem by leveraging existing office network, security and server infrastructure through its secure digital platform.

Netlinkz has created the award winning Virtual Secure Network (VSN), an encrypted software-based network which evades detection.

“Our encryption makes the network invisible on the internet, so a hacker can’t find a point to actually hack,” Netlinkz CEO, James Tsiolis, told Stockhead.

“Every endpoint in the network that makes up the network is encrypted. So it’s not just the gateway that’s encrypted: every device which joins the network is also automatically encrypted.”

This, Tsiolis says, is what sets the Netlinkz VSN apart from its competitors, and the main reason why it’s first iteration was named the worldwide winner of the US Department of Defence’s Global Security Challenge.

Thinking bigger

The current VSN product evolved out of Netlinkz’ VIN (Virtual Invisible Network), and is currently being offered to the market as a cloud-based NaaS (Network-as-a-Service) solution.

Over the last year, Netlinkz has been focused on building up its annual recurring revenue (ARR) streams via this NaaS offering.

In the last quarter, revenue increased by 12% on pcp, which cemented the company as one of the fastest growing network security companies in Australia.  SSI, the company’s “legal intercept” division was a strong contributor. In a little over three years SSI more than paid for itself with the momentum continuing into January. SSI is not only an excellent asset financially, it provides us with high level insight into the world of cyber criminality.

Underpinning revenue growth is the company’s customer base, which has increased from just one global enterprise customer in 2019, to 102 enterprises by the end of 2022. The  company’s strategic push into China has also significantly contributed to the company’s rapid upward trajectory.

“When I joined six years ago, the product was designed to cater for small to medium enterprises in Australia,” explained Tsiolis.

“But when we took the product to China, we needed to rewrite much of the source code, because it didn’t scale to the extent needed in China.”

Through a distribution deal with China Telecom in the province of Jiangsu, Netlinkz was able to redesign the VIN product to the current next generation VSN.

The VSN basically works by helping companies go from old legacy systems into the Cloud, and then allows their workforces to become mobile and work remotely. The attraction of the upgraded VSN is that by design it is zero trust by default.  No one is trusted until the controller gives access according to organizational need.  This role-centric approach can be modified quickly as circumstances change and trust grows. Conceptually this is the opposite of the Medibank situation where, once the criminals had the digital keys, they had access to every client file.

But as well as ‘zero trust’ being an attraction to big companies, the speed of the VSN is appealing. It is faster because the VSN uses software only to power the connections.

This has another benefit as well. Corporations no longer communicate simply between plant A and plant B or between office and office. Cloud services sit in the middle. This means the corporation and its units and staff are untethered. They can operate wherever their people are and, because the VSN is deployable in all the major Cloud providers like Amazon AWS, Google, or Azure, there is no loss of security as a result of this mobility.

Starlink and Thailand deals

In November, Netlinkz secured a deal to become a global reseller of the Starlink satellite-based broadband internet service developed by Elon Musk’s Space-X company.

This agreement meant that Netlinkz could market Starlink’s satellite based high-speed, low-latency broadband internet.

With the satellites positioned in low-Earth orbit, Starlink’s product is able to achieve significantly higher transmission speeds for its end users.

The agreement with Starlink creates a direct channel for Netlinkz to market its own VSN solution and so far, enquiries about the Starlink offering have been very strong.

During the quarter, Australian and foreign governments, multinational business, local and overseas telcos, as well as rural and remote businesses have expressed interest.

“An average Starlink product sale is around $3,700, so it gives you the level of potential revenue for us. Starlink is a significant play for the company,” said Tsiolis.

Barely a month after inking the Starlink deal, Netlinkz signed another strategic deal : in this case with  a listed Thai telco supplier, ALT Telecom, which will allow the VSN product to be offered in the Thailand market.

The deal was hailed as a breakout moment for Netlinkz, as ALT Telecom is one of the leading Southeast Asian suppliers of comms hardware and software serving multiple industries at a time when Thailand is becoming a key destination for capital.

“Largely due to prolonged investment by Japanese auto companies Thailand is called the ‘Detroit of Asia’, but now that China-US relations are cool, China’s investment in Thailand is growing. As of 2022 it was higher than Japan’s. Much of the investment is going into car production, but also electronics, renewables and medical equipment. Then there’s Taiwan. Foxconn is moving some of its Apple iPhone production to Thailand, but also planning to compete with Chinese EV manufacturers in Thailand. Both BYD and Foxconn say they will be producing EVs in Thailand by 2024.

“In this situation high quality communication is important not only within Thailand for supply but between Thailand and China, between Thailand and Taiwan etc. This is positive for both arms of our business.  There’s fundamentally no difference between what we’re doing with Starlink and what we’re doing with ALT,” said Tsiolis.

“The strategy is very similar in that we’re establishing a Network as a Service offering.”

Exciting times ahead

Netlinkz has made important Board and management additions recently to take the company to the next phase of its growth.

Hakan Eriksson, a former Chief  Technology  Officer at Telstra and Ericsson, has joined Netlinkz  as an Independent Non-Executive in October.

The company also hired a senior China telecommunications executive , Anthea Ye, as its new Chief Operating Officer. Also an electronics engineer, Ye was the CEO  Australia and Oceania for China Telecom.

“We’re going to start growing our revenue significantly,  and we’re starting to approach the point where we will become cashflow positive,” said Tsiolis when asked about Netlinkz’s outlook.

“The other goal for us is to establish ourselves in Southeast Asia and the Pacific now that we’re already established in China.

“So it’s an exciting next phase for Netlinkz as we develop and grow revenue. I would  also include Australia and New Zealand in that strategy,” said Tsiolis.

This article was developed in collaboration with Netlinkz, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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