Business model of Gemalto

Customer Segments

Gemalto has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at businesses and governments.

Value Proposition

Gemalto offers three primary value propositions: performance, risk reduction, and brand/status.

The company demonstrates strong performance through tangible results. Specific examples of positive outcomes for clients include the following:

• Fraser Health Authority utilized Gemalto’s authentication solution, IDPrime smart cards, for its healthcare staff, resulting in increased patient satisfaction and a 20% reduction in support costs
• British Sky Broadcasting Group used Gemalto’s IDPrime.NET Converged Badge solution for 4,000 users, resulting in reduced costs and increased security
• AXA Technology Services used Gemalto’s authentication solutions to strengthen overall IT security by reducing password sharing, badge swapping, and network attacks

The company reduces risk by maintaining high safety and security standards, as follows:

• Its solutions utilize multi-factor authentication, making logging in more secure
• Its hardware security modules provide strong encryption, authentication, decryption, and digital signing services for a broad range of applications
• It maintains a centralized organization that focuses on the prevention of cyber security risks, called the Computer Security Incident Response Team (CSIRT)

The company has established a strong brand due to its success. It is the world’s largest producer of SIM cards. It generated €3.1 billion in revenues in 2015. It has over 14,000 employees operating out of 118 offices in 49 countries.

It serves over 30,000 organizations in over 180 countries, and they include many prominent companies, such as Amazon Web Services, Verizon, Audi, and China Telecom. Its survey of customers in 2015 indicated that 86% of them were "satisfied" or "very satisfied" with its service. Lastly, it has won a number of honors, including the following:

• The Cybersecurity Excellence Award for Best Multi-Factor Authentication Solution from the LinkedIn Information Security Community
• Recognition as “Best Identity Management Platform” at the GSN Homeland Security Awards
• Recognition as the world's number one supplier of contactless and mobile solutions for public transportation by three market research firms (ABI Research, Juniper Research, and IHS)
• The Digital Payments Award from Juniper Research for Digital Payments
• The Frost & Sullivan Customer Value Leadership Award for Border Control and Biometrics

Channels

Gemalto’s main channel is its direct sales team. It also utilizes resellers and distributors to sell its products. The company promotes its offerings through its website, social media pages, and participation in summits, exhibitions, and conferences.

Customer Relationships

Gemalto’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees.

The company’s website provides answers to frequently asked questions. It also provides access to an e-mail newsletter featuring product updates and industry trends; access to “Digital Security in Action”, an online magazine featuring articles about innovations; and access to print magazine “The Review”, which discusses trends in the mobile, payment, public sector, IT security, and M2M categories.

Despite this orientation, there is a personal assistance component. Gemalto offers general phone and e-mail support. It also provides over 50 courses on digital security and communication technologies. The classes can be taken at public locations or conducted privately at company sites.

Key Activities

Gemalto’s business model entails designing, developing, and producing its products for customers.

Key Partners

Gemalto maintains the Gemalto Partner Network, which includes four types of organizations:

Business Partners - Firms that promote and resell Gemalto products and solutions. Specific partners include Microsoft, IBM, Citrix, and Open Trust.

Technology Partners - Firms that develop products (software and/or hardware) that complement Gemalto‘s solutions. Gemalto ensures the products work together and co-markets them.

Solutions Partners - Firms  that use Gemalto‘s development tools and reference designs to develop solutions. Gemalto markets these solutions to its clients and may resell them in some cases.

Original Equipment Manufacturers – Firms that embed and resell Gemalto‘s technologies in their products with their own branding.

Benefits provided to partners include the following:

• Special pricing
• Sales and technical training
• Technical assistance
• Marketing and pre-sales support
• Access to an online CRM

Key Resources

Gemalto’s main resources are its human resources, who include the over 3,000 engineers it employs to design and develop its products, the sales staff members that promote the offerings, the training staff members that provide instruction, and the customer service personnel that provide support.

It also maintains important physical resources in the form of 45 personalization and data centers, 27 research and software development centers, and 17 production facilities located worldwide. Lastly, it places a high priority on its intellectual property, and filed applications for 107 new patents in 2015.

Cost Structure

Gemalto has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is likely cost of products, a variable expense. Other major drivers are in the areas of sales/marketing and research/development, both fixed costs.

Revenue Streams

Gemalto has two revenue streams: revenues it generates from sales of its products/solutions and revenues it generates from sales of its professional services such as training.