CSP Inc. (CSPi or CSPI) and its subsidiaries develop and market IT integration solutions, advanced security products, managed IT services, cloud services, purpose-built network adapters, and high-performance cluster computer systems.
Segments
CSPI operates in two segments: Technology Solutions (TS) and High Performance Products (HPP).
TS segment
The TS segment consists of the company’s wholly owned Modcomp, Inc. subsidiary, which operates in the United States and the United Kingdom.
The TS...
CSP Inc. (CSPi or CSPI) and its subsidiaries develop and market IT integration solutions, advanced security products, managed IT services, cloud services, purpose-built network adapters, and high-performance cluster computer systems.
Segments
CSPI operates in two segments: Technology Solutions (TS) and High Performance Products (HPP).
TS segment
The TS segment consists of the company’s wholly owned Modcomp, Inc. subsidiary, which operates in the United States and the United Kingdom.
The TS segment generates product revenues by reselling third-party computer hardware and software as a value-added reseller (VAR). The TS segment generates service revenues by the delivery of professional services for complex IT solutions, including advanced security; unified communications and collaboration; wireless and mobility; data center solutions; and network solutions, as well as managed IT services (MSP) that primarily serve the small and mid-sized business market (SMB).
Third party products and professional services are marketed and sold through the company’s direct sales force into a variety of vertical markets, including automotive, defense, healthcare, education, federal, state and local government, and maritime.
HPP Segment
The HPP segment revenue comes from three distinct product lines: a cybersecurity solution marketed as ARIA Software-Defined Security (SDS), which is offered to commercial, original equipment manufacturers (OEM) and government customers; the Myricom network adapters and related software for commercial, government and OEM customers; and the legacy Multicomputer product portfolio for digital signal processing (DSP) applications within the defense markets.
The ARIA SDS solution is a software portfolio comprises 3 products: ARIA Packet Intelligence software which is used by customers for its high-speed wire-rate in-line packet filtering, steering and policy enforcement functions. ARIA Advanced Detection and Response solution used by customers to find and stop threats in real-time by monitoring their entire network, device and services footprint. It is used as the basis of MDR (Managed Detection and Response) services offered by ARIA and its MSSP partners who provide it as part of a 24x7 managed SOC (Security Operations Center) offering. The product automates the MITRE ATT&CK framework to find threats up to 100 times faster with fewer human resources than other solutions.
In July of 2023, ARIA Zero Trust (AZT) PROTECT was introduced to the market. ARIA AZT PROTECT was designed to fill a gap in the market – stopping the most sophisticated attacks that are used to attack critical infrastructure applications before harm can be done. It compliments other protection technologies already in place and can stop some of the most well-known attacks, including the SolarWinds attack, and the recent Russian sponsored Sandworm attacks used on utilities and energy infrastructure. The product is already deployed and generating revenue from its initial contracts.
Revenue is derived from: (i) license sales of the company’s software platform components, (ii) support packages and (iii) any required supporting services. The software licenses, the support packages, as well as supporting services are renewable on a recurring basis.
The ARIA portfolio is of value to regulated industries, such as manufacturing, pharmaceuticals, financial services, energy production, utilities, transport and healthcare, due to the rise of critical infrastructure regulations enforced at the federal, U.S. state, and international level, as well as industry entities. In addition, due to the complexities and high-costs associated with enterprise-wide security, particularly in the creation and operation of SOCs, ARIA will be attractive to organizations that desire SOC level protections without incurring the procurement of disparate tools and the need to hire and retain highly trained security analysts. The company also has begun selling its unique solution into Managed Security Service Providers (“MSSPs”) that want to offer a lower cost, more effective service at detecting today’s widening range of cyber-attacks.
The Myricom SmartNIC adapters (ARC Series and Myricom Secure Intelligent Adapters or SIA) are optimized for and sold into markets that require high-bandwidth and low-latency, including packet capture, financial transactions, machine vision and network security. The ARC series has reached end of life due to ASIC supplier problems which will significantly reduce its contribution to the HPP line of business. The focus is now supporting its applications on 3rd party provided intelligent network interface cards.
Multicomputer products for DSP applications are no longer actively developed but will continue to be sold into established programs through FY 2025 and supported for several years via the company’s repair services offering.
TS Segment
Products and Services
Integration Solutions
The TS segment is a value-added reseller (VAR) of third-party hardware and software technology solutions along with its advanced technology consulting, professional IT, managed IT and Cloud services. The company’s value proposition is its ability to support the complete IT life cycle of planning, designing, implementing and optimizing a comprehensive solution into its customers’ IT environments, to help achieve their expected business outcomes.
Third-Party Hardware and Software
The company sells third-party hardware, software, and information technology products, with a strategic focus on industry standard servers and data center infrastructure solutions, midrange data storage infrastructure products, networking and mobility products, unified communications, and advanced IT security hardware and software solutions. The company’s key offerings include products from Hewlett Packard (HPE)/Aruba, Cisco Systems, Palo Alto Networks, Nutanix, Dell EMC, Juniper Networks, Citrix, Intel, VMWare, Fortinet, Microsoft, and Barracuda. Through its business relationships with these vendors, the company is able to offer competitively priced robust products to meet its diverse customers’ technology needs, providing procurement and engineering expertise in server infrastructure, storage, security, unified communications, mobility, and networking to small-to-medium sized businesses (SMBs) and large enterprise businesses (LEBs) with unique and/or complex IT environments. Many of the company's SMB customers have unique technology needs and may lack technical purchasing expertise or have very limited IT engineering resources on staff. The company offers its customers a single point of contact for complicated multi-vendor technology purchases. It also provides installation, integration, logistical assistance, and other value-added services that customers may require. The company targets SMB and LEB customers across all industries. Its current customers are in web and infrastructure hosting, education, travel, telecommunications, healthcare services, distribution, financial services, professional services, and manufacturing.
Professional Services
The company provides professional IT consulting services in the following areas:
Assessments, planning, designing, implementation, migration, optimization services and project management.
Hyper-Converged Infrastructure (HCI): The company assist its clients with designing and implementing HCI solutions from multiple vendors including DellEMC, Nutanix, HPE and Cisco. HCI is a software-centric architecture that tightly integrates compute, storage and virtualization resources in a single system. The benefits of an HCI solution are improved performance, scalability and flexibility all in a reduced footprint.
Virtualization: The company helps its customers implement virtualization solutions using products from companies such as VMWare, Nutanix and Citrix that allow one computer to do the job of multiple computers by sharing resources of a single computer across multiple environments. Virtualization eliminates physical and geographical limitations and enables users to host multiple operating systems and applications on fewer servers. Benefits include energy cost savings, lower capital expenditure requirements, high availability of resources, better desktop management, increased security and improved disaster recovery.
Enterprise security intrusion prevention, network access control and unified threat management. Using third-party products from companies like Palo Alto, Aruba Networks, Juniper Networks, Fortinet, Barracuda and Cisco Systems, the company’s services are designed to ensure data security and integrity through the establishment of virtual private networks, firewalls and other technologies.
IT Security Compliance Services: The company provides services for IT security compliance with personal privacy laws such as the Payment Card Industry Data Security Standard (PCI DSS), the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and internal control regulations under the Sarbanes-Oxley Act (SOX).
Unified communications, using Cisco Systems and Microsoft solutions: The company is Cisco Premier Partner approved for its Cloud and Managed Services Program for Managed Business Communications and a Microsoft Gold Partner with specialties in Cloud, and Collaboration solutions.
Wireless, routing, and switching solutions using Juniper Networks and Aruba Networks products and services.
Custom software applications and solutions development and support. The company develops custom applications to customer specifications using industry standard platforms such as Microsoft.Net, SharePoint and OnBase. The company is a Microsoft Gold Partner.
Managed IT services that include monitoring, reporting and management of alerts for the resolution and preventive general IT and IT security support tasks.
Optimization, maintenance and technical support for third-party products including hardware and software, operating system and user support.
Managed IT and Cloud Services
As consumption models continue to evolve in the industry, the company has developed a robust managed and cloud services portfolio to provide alternative solutions to traditional capital expenditure investments in IT solutions and IT operations for its clients. The company's value is to provide an elastic offering that will allow clients to scale and consume these offerings with monthly billing options that help control costs and provide economies of scale.
The company provides managed and cloud services in the following areas:
Proactive monitoring and remote management of IT Infrastructure that includes network (both wired and wireless), data center (which includes compute, storage and virtualization), desktops, unified communications platforms and security.
Managed and Hosted Unified Communication as a Service via a Cisco Communication and Collaboration solution under an annuity program.
Managed Security (firewall, endpoint protection, malware, anti-virus Managed Detection & Response).
Managed BackUp and Replication.
Cloud services that include Microsoft 365, Azure, Azure Virtual Desktop, Greencloud, Amazon Web Services and Google Cloud Platform.
Markets and Marketing
The company is an IT systems integrator and computer hardware and software VAR. It also provides technical services to achieve a value add to its customers. The company operates within the VAR sales channels of major computer hardware and software OEMs, primarily within the geographic areas of its sales offices and across the U.S. The company provides IT solutions, including a myriad of infrastructure products, along with customized professional IT consulting services and managed services to meet the unique requirements of its customers. It markets the products and services it sells through sales offices in the U.S. and the U.K. using its direct sales force.
Competition
The company’s primary competition in the TS segment is other VARs ranging from small companies that number in the thousands, to large enterprises, such as CDW, PC Connection, Insight, Presidio, Dimension Data, and Computacenter Limited. In addition, it competes directly with many of the companies that manufacture the third-party products it sells, including Cisco Systems, IBM, HPE, EMC (now part of Dell) and others. In the network management, security and storage systems integration services business, the company’s competitors are extensive and vary to a certain degree in each of the geographical markets, but they also include such national competitors as HP/EDS, IBM and Cap Gemini.
HPP Segment
Products and Services
The company’s software-defined platform makes it easier for organizations to achieve enterprise-wide network security with a focus on the protection of critical assets, applications and devices from cyberattacks.
Markets and Marketing
Cyber Security Products Market
The ARIA SDS solution is targeted at organizations that need to get additional functionality out of their current cybersecurity solutions to find and stop attacks, while also reducing their operating costs. At the present time, the company’s ARIA solutions are primarily offered through its direct sales channel, however with ARIA AZT PROTECT’s introduction it has begun to add channel partners such as independent resellers.
OEM vendors in the cybersecurity market can benefit from integrating the ARIA applications and leveraging them as internal solutions to allow their applications to scale and add critical functionality. OEMs are interested in running its ARIA SDS applications on their SmartNIC and other ARM-core based platforms.
As mentioned, MSSPs require simple, yet differentiated, solutions that can be deployed across their customer bases. The detection and automation capabilities found in ARIA solutions are valuable as they allow these security service providers to scale their offerings while increasing the productivity of their security operation center staff.
Competition
CSPi’s competition in the cybersecurity space comes primarily from the large, traditional security vendors like Palo Alto, VMware and security services providers like Arctic Wolf.
Research and Development
For the year ended September 30, 2024, the company’s expenses for R&D were approximately $3.0 million.
Intellectual Property
The company has newly issued, as well as pending patents for the ARIA AZT PROTECT software and will be pursuing additional patent rights over time.
History
CSP Inc. was founded in 1968. The company was incorporated in 1968.
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