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CAaNES another NM Tech success story

Chalk up another major success for technology transfer at the New Mexico Institute for Mining and Technology in Socorro.

The university, which hit the big time in the 1980s after creating and commercializing the original “nicotine patch,” is now reaping significant benefits from Computational Analysis & Network Enterprise Solutions LLC, a cybersecurity firm that NM Tech launched in 2006.

But unlike the nicotine patch – which generated tens of millions of dollars in patent royalties for the university after licensing its technology to private investors – NM Tech retains a major stake in CAaNES with 50 percent ownership of the company.

And it’s now growing at a spectacular rate. CAaNES reached $3 million in revenue in 2013, and it expects to hit $5.5 million this year. That’s up from $756,000 in 2009, and $1.25 million per year in both 2010 and 2011.

In fact, the firm is expanding so fast it needs a lot more space to accommodate its workforce, which more than doubled since 2012, from 16 to 36 people, said CAaNES President Mark Fidel. In the next couple of years the company expects its employee base to nearly double again, reaching 55 by early 2016 and 70 by 2017.

The company rents two spaces now in Uptown Albuquerque and the Northeast Heights with a combined 4,900 square feet. But it’s practically bursting at the seams.

“It’s pretty tight right now,” Fidel said. “We want to consolidate our operations in one place with a lot more space to grow.”

To do that, CAaNES is hoping to buy the Aperture Center at the Mesa del Sol master-planned community south of Albuquerque. That’s a three-story, 80,000-square-foot building.

The price tag must yet be announced since negotiations are still ongoing with the building owners, but the Bernalillo County Commission approved up to $4 million in industrial revenue bonds in October to help CAaNES acquire the facility. And the company already has private financing in place for the transaction, Fidel said.

Buying the Aperture Center represents a huge accomplishment for a startup company that built its business from scratch over the last eight years.

CAaNES is actually the brainchild of its chief technology officer, Srinivas Mukkamala, a senior research scientist at NM Tech’s Institute for Complex Additive Systems Analysis, or ICASA.

Fidel and Mukkamala are partners with a combined 50 percent stake in CAaNES, which subcontracts to ICASA for a lot of its work. That allows the university to benefit not just from profits on its stake in the company, but from revenue generated by work for CAaNES. In addition, it provides valuable, hands-on experience for students who work at ICASA, while generating a talent pool for new CAaNES hires.

The company provides network security and digital forensics technology services to businesses using proprietary software developed by NM Tech researchers. That software has since been made into a comprehensive product that the company now licenses to clients, either for them to operate on their own, or as a software-as-a-service model hosted by CAaNES.

The software tells a business what’s not working for their entire network, why it’s not working and how to fix it, Fidel said. It also provides online management tools for executives to supervise, track and evaluate system remediation tasks to correct problems.

The product, called RiskSense, has helped speed revenue growth this year, following the software’s commercial launch in late 2013. And CAaNES is now building on the RiskSense platform to create new products, including one it plans to roll out for beta testing next year that will rapidly identify malware, Fidel said.

The company currently has about 220 clients throughout the U.S., up from about 160 two years ago. That includes customers in the utilities, health care, retail, higher education and financial services industries, apart from public sector clients such as the City of Albuquerque.

And CAaNES has partnerships with three telecommunications companies – CenturyLink, Integra Telecom and Level 3 Communications Inc. – to market CAaNES’ services to their customers as resellers.

If CAaNES does close on the Aperture Center, it will benefit the university as well by providing a lot of potential space for NM Tech research programs. CAaNES expects to use about 20,000 square feet at the Aperture center and lease out the rest.

“It’s always good to have a footprint in Albuquerque where we can expand our research efforts,” said NM Tech Vice President for Research and Development Van Romero. “We have a lot of programs and projects with the Air Force Research Laboratory at Kirtland Air Force Base, so we could take advantage of space at Mesa del Sol to boost that partnership.”

The Aperture Center also has a $22 million renewable energy microgrid that includes solar, fuel-cell and natural-gas systems, plus back-up battery storage and a command and control center to power the entire building. The microgrid was built by Japanese companies under the direction of Japan’s New Energy and Industrial Technology Development Organization, which donated it to the University of New Mexico this year to further research and development on integrating renewable energy into electric grids.

For CAaNES, access to the microgrid will allow the company to do its own research and development of cybersecurity for utilities, Fidel said.