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Strategies & Market Trends : Voting Machine Companies -- Ignore unavailable to you. Want to Upgrade?


To: KLP who wrote (39)11/28/2000 7:25:14 AM
From: levy  Read Replies (1) | Respond to of 69
 
thanks klp.......getting certified in the usa is not easy from what I here.....some have said it could take up to 2 years....I found a list similar to yours in an earlier post that lists those that are certified...what I don't know is if certification is a state by state thing or not...I thnk it is...also being able to invest is another thing.....several have pointed out that gsm is the only play....at the moment I have been limiting my assestment to gsm but I jst can't get myself to invest with the stock up 50% already since election

Global Election Systems Inc - Street Wire

Global Election positioned for future of voting

Global Election Systems Inc GSM
Shares issued 18,583,672 2000-11-20 close $2.35
Tuesday Nov 21 2000 Street Wire
HIGH-TECH VOTING MAY BE ANSWER TO U.S. ELECTION MESS
by Stockwatch Business Reporter
In a world of surging Internet access, on-line banking and automated teller machines -- not to mention the widespread availability of cheap electronic calculators -- the events following the Nov. 7 U.S. presidential vote in Florida were an uncomfortable reminder that while the United States may lead the world in developing and using computer technology, there remain stubborn pockets of technological backwardness capable of delaying national-election results in the world's only superpower for weeks, possibility longer.
University of Iowa computer science professor Douglas Jones says Global Election Systems is one of a half-dozen-odd electronic voting machine suppliers that are in a position to benefit from an election-hardware rethink that is sure to follow the Florida recount debacle. He says electronic voting machines will most likely replace a hodgepodge of antiquated systems that have been in continuous use, in some places, for more than 50 years.
BOOMING MARKET
"All these competitors are positioned to take advantage of what will be a booming market as jurisdictions that have been using punch cards run like the dickens to get away from this technology," Prof. Jones says. "In the near term, I would expect a big shakeup because of this election disaster and a lot of people are going to be out shopping for new voting hardware." Farther down the road, Dr. Jones contends that with the emergence of direct recording electronic voting machinery and the changing industry standards that will probably emerge, "Global is in a position to do well."
Global has already proved the benefit of its electronic voting systems in the current Florida pressure cooker -- as have some of its competitors that have their own systems operating in the state. When officials in Florida asked for recounts of all balloting, results from Global's machines were recounted in hours, not days or weeks. More importantly, the recounts were quickly cleared by election officials as accurate, without controversy and without the lawyers or images of workers haggling over whether a hole was fully punched through or whether a hanging chad was, in fact, simply an errant bit of paper.
"We have 17 counties in Florida and on recount all 17 had exactly the same results" as the original vote tallies, says Global director Clinton Rickards. In some jurisdictions, officials wanted the company to feed through the original hard-copy ballots, while others were satisfied with a simple retally of the totals. "Because the totals came out the same, there was no problem," says Mr. Rickards, a programmer who in 1986 began developing the forerunner of Global's current electronic voting systems.
The developments provided Vancouver-based Global with a short-term boost. Its shares gained 88 cents to $2.65 (Canadian) Nov. 13 on unusually high volume of 865,432 shares on the Toronto Stock Exchange following an initial flurry of press coverage about the company; the shares have since eased to $2.40 (Canadian) on much lighter volume. According to Global officials, what is more important than the short-term gains of the shares is the credibility the company gained in the Florida recount and how the issue of electronic balloting has been highlighted as an area that needs legislative attention.
Some states are moving quickly toward updating their mid-20th-century balloting technology. In Georgia, Secretary of State Cathy Cox is pushing for a uniform electronic-voting system. She is hoping for a 25-county pilot project by 2002 and possibly a statewide rollout in time for the next presidential election. The Wall Street Journal quoted Ms. Cox as calling electronic balloting a "superior" system and Georgians will have the opportunity to decide whether statewide electronic balloting is worth the cost.
STEEP PRICE
The cost is much higher than hole-punch or any of the older systems. A California study indicated that if Los Angeles county were to upgrade to an electronic system (it is now predominantly punch cards), the cost would be $350-million (U.S.).
Larry Ensminger, Global's vice-president of business development, says the cost is variable and tends to work on volume discounts -- the more you vote, the cheaper they are per voter. Global's AccuTouch touch-screen system costs $3,500 (U.S.) per unit "plus or minus many other factors," Mr. Ensminger said from the company's Texas office. Each unit would typically handle 350 registered voters, and that number can also change depending on the state, county or precinct in question. The systems are scalable, so additions can be made at a later date.
The Florida fiasco has raised the issue of voting reform to the point that many states are considering an appeal to the federal government for funding to overhaul their present systems. Counties are responsible for all three levels of government elections -- civic, state and federal. In the past, states and counties provided this funding. "What I'm hearing now in just the past week is that a lot of the senators and governors are saying that maybe they should have the power to upgrade this technology," Mr. Rickards says.
Global, which is also listed on the OTC Bulletin Board, has built its annual revenues from $3.5-million (Canadian) for the year ended Dec. 31, 1992 (net profit $58,825(Canadian)) to revenue of $20,236,828 (U.S.) and net income of $1,107,419 (U.S.) for the year ended June 30, 2000. Its balance sheet is bolstered by a working capital position of $14,731,648 (U.S.) and retained earnings of $22,496,464 (U.S.). While closely held competitor Election Systems & Software Inc. (ES&S) dominates the field, with systems in 2,200 U.S. counties and 350 employees, Mr. Rickards contends that the smaller Global (its systems are in 850 jurisdictions worldwide, including Canada) sells more new equipment.
Formed by the 1997 merger of American Information Systems and Business Records, ES&S can traces its origins in the business to the mid-1960s. Global is much newer. Its first sale was in 1989 to a county in Minnesota, while the second sale was in 1990 to Tallahassee, Florida's state capital and centre of the current recount controversy. It listed on the former Vancouver Stock Exchange in November, 1991, following the 1:8 rollback of Macrotrends International Ventures.
FLORIDA EFFECT
The Florida vote has probably advanced the electronic voting industry's marketing efforts by years. Today, punch card technology (at 37-per-cent use, the most popular system in the United States) dates to the 1960s, while hand levers, which date to the 1940s, command 22-per-cent popularity. One in four use optical scan systems, while 7 per cent of U.S. voters use keyboard or touch-screen systems.
With an overhaul of the country's voting system over the next few years a possibility, the industry's existing players may fear some of the bigger computer companies may want to enter the sector to dominate what could be a lucrative field.
At least one industry source says participation by major computer companies is actually an opportunity for these players. "IBM and Unisys have tried to get into this business and have been in this business," he says. "IBM was the creator of the punch-card system in the 1960s, and Unisys has done some developmental work in this area as well." The difference is that the larger companies do not have the patience for the long gestation periods needed to make a sale, and are happier to see sales of their hardware run the software developed by players in the electronic voting machine industry.
Global makes two models of electronic voting systems. One is AccuVote, a PC-based optical scan system, in which voters shade in the candidates of choice with a pencil and a scanner records the results; a paper record of the vote is left with officials. This system, of which Global is only one supplier, is used in about a quarter of the nation's 3,140 counties.
The other system is AccuTouch. With it, voters are given smart cards that contain the data needed to vote for candidates in that particular precinct. Once inserted, this information is displayed on a 15-inch monitor in large letters and the voters touch the screen to indicate his or her preferences. These systems are used by about 7 per cent of voters.
Mr. Rickards says that older people appear to have few problems with either the touch-screen or optical scan systems. "We find that seniors have no problem, either filling out a ballot or filling in a circle or touching a screen," he says, adding that the touch-screen system is particularly user-friendly. "It's in very large type and it's impossible to cast a double vote. Make a mistake and do it again. You can't put in another vote until the first is erased," Mr. Rickards says.
A number of Canadian jurisdictions have picked up Global products, including the City of Vancouver, which used the optical-scan system citywide for the civic election in November last year. Global's touch-screen system was first used in the Barrie, Ont., civic elections held last week.
WAY OF THE FUTURE
Prof. Jones says that over the years advanced voting technology has produced what might be considered surprisingly similar results, indicating that the main players are making the best use of available technology and arriving at the same "solutions." He says that independently of each other, Global and its main competition came out with machines whose technology is remarkably similar but not the same. One competitor, Fidlar Doubleday Inc., uses a personal identification number (PIN) in its touch-screen system, while Global uses a smart card. Both systems are designed to be networkable and both are designed with the possibility of Internet voting in mind.
"Each has independently come up with effectively the same idea for what the future ought to look like, and they're right in their big picture view," Prof. Jones says.
The similarities between the systems tend to end at that point, however. The real differences are found in the programming, and the professor says what is needed before the technology is accepted on a truly national scale are standards. Given uniform standards, competing suppliers will provide voting systems that are essentially the same technology but which may look and feel slightly different; additions could be made using different suppliers.
At the moment, no such standards exist, and getting the industry to agree on such standards may be a challenge. Further, "The current federal and state laws do not properly allow for the state of the art, much less what the state of the art will be," Dr. Jones says. Talk of such standardization will be a source of great concern to these vendors "because I know I and a number of other computer professionals are going to be pushing hard for open-systems standards."
While there may be great anxiety among vendors about what these standards will ultimately be, standardization of any kind will be a tremendous boon to the industry -- even though standardization would presumably allow for many more players to enter the business.
At the moment, each supplier tends to have its own proprietary standards for how they communicate a result to a central system, and this locks the customer into buying central vote-tallying software from that particular vendor. This in itself is an inhibiting factor in selling the systems because from then on, buyers are essentially denied the benefits of competition. "Federal standards don't govern that central-vote-tallying software standard, and they ought to. And in fact I think what we really need are federal standards for the electronic transmission of vote results that are independent of whether it's Internet transmission or transmission by smart card or modems and phone lines," Dr. Jones contends.
INDUSTRY SHAKEUP
The industry can make its own standard or a standard can be imposed by the states or by the federal government "but we need a standard," he argues. "This will shake the industry and how that works itself out is going to be interesting."
A parallel of the importance of standardized technology is with the home PC. In the very early 1980s, many different suppliers competed with their own proprietary systems, and it was not until a de facto winner emerged -- the IBM/Microsoft standard -- that the PC industry really took off later in the decade and on through the nineties.
Prof. Jones and some of his like-minded colleagues want to see open source technology, which takes standardization one step further. Open source means that the source code is available for inspection by qualified individuals. This open-source-versus-proprietary debate is at the heart of the challenge by the open-source Linux operating system and the closely guarded source code of the Microsoft Windows operating system.
Open-source software is the industry's best bet for transparency and trust in a system that requires an unusual amount of trust. "There is a widespread distrust of computer software among election officials and I think it's a deserved distrust," Prof. Jones says. "How can you trust proprietary software to be free of features that are not supposed to be there?"
He notes that independent third party authorities test the current software used in electronic balloting, but programmers are skilled at hiding features that are not supposed to be there. Usually these "Easter eggs" are harmless, such as users being able to play the programmer's college fight song if they hit a particular sequence on the keyboard, but some are not so benign and can be embarrassing for a client -- such as Microsoft -- that ordered the software, inspected it and took delivery from the supplier.
VOTE FOR LINUX
Prof. Jones envisions the demise of proprietary third party code and a move toward open source code in electronic voting. His preference is an open source code along the lines of Linux. "Linux is entirely open source, therefore you can have a version of Linux which you simply freeze say we'll use this version and the certification process includes the verification that this is indeed the version of the system on the machine, and that version is posted on the Web and if anyone who is suspicious can inspect it," he says.
If big-picture Internet thinkers are to be believed, it is only a matter of time before voters exercise their franchise from the comfort of home. On-line voting received a lot of attention earlier this year when the Democratic primary in Arizona and a few other smaller elections were held on-line.
Experts say these elections amount to little more than data collection and not to be confused with a federal or state elections, where the scale of the undertaking and the need for transparent verification of the results must be in place. Prof. Jones, for example, says the only way Internet voting could work today is if each voter were issued CD-ROMs. The user would boot his or her computer from that CD-ROM, which would contain a complete certified software system for election administration and so bypass his own operating system.
"This would be so inconvenient, I think what we'll see is not voting from home on a widespread basis. What we'll see is voting from polling places and special-purpose voting machines built like tanks and running certified special-purpose vote-counting operating systems and voting software," Dr. Jones says. "And that's exactly what companies like Global are positioned to sell, and that is exactly what we should be looking for."