Contract Signals the End to Codercard’s Wait for Its Future to Arrive

Robert W. Herman can sympathize with companies that make automobile air bags--one of those sure-fire products of the future that deflated somewhere along the road.

Herman, one of Orange County’s high-tech pioneers and founder of Codercard, a tiny Irvine company that makes computer security cards, has been waiting--and waiting--for his firm’s products to find a market.

Unlike those unlucky makers of air bags, however, Herman may be nearly through waiting.

On Thursday, 4-year-old Codercard announced its first major sale--a five-year, $1.25-million distribution agreement with Signum, a Laguna Niguel company.

The contract will guarantee $250,000 in annual revenues for Codercard--about the same amount the company recorded from all sales for its fiscal year ended June 30. “All our work is beginning to take off,” Herman said Thursday.

But the wait, he added, “has taken longer than I expected, by about 100 times.”

The agreement gave Signum a five-year, non-exclusive franchise to market Codercard’s full line of computer security products to commercial customers in California, Arizona, Oregon, Nevada and Washington. Signum specializes in data communications and security-related products.

Frank Dragun, Signum’s president, said he believes the computer security business “is on an upswing.”

Founded in 1983, Codercard makes electronic cards designed to foil computer hackers and others trying to gain unlawful access to computer files. The credit-card-sized devices allow authorized holders to gain access to a computer.

Herman founded Codercard because he believed there would be a widespread need for security devices as computers proliferated in business and government, increasing the likelihood for fraud and abuse.

Despite the growth potential in the computer security business, Herman said he believes there remains “a disparity between the perception of the market and the market itself. The whole world perceives there is a significant social problem (with computer security). But what to do about it has been a long time in coming.”

Codercard has been trying for two years to interest government agencies such as the National Security Agency in its product. But a major sale has been elusive.

Herman hinted that deals with some customers he wouldn’t name are in the works. “Every one of them is very sensitive,” he said, “and we’ve been told we can’t talk about them.”

A veteran of the high-tech business, Herman founded Decision Control, an Irvine electronics company, in 1959. Many Orange County technology firms--such as AST Research, Computer Automation and Emulex--trace their roots Decision Control.

Since selling Decision Control to Varian Associates in 1967, Herman has started a string of high-tech ventures with mixed success. For example, a company he founded in the 1970s to make automated weather stations was modestly successful. But a company he formed in the late 1970s to manufacture high-speed computer disk drives never got off the ground.