Long Island Technology Briefs: May 25, 2007

Long Island Business News, May 25, 2007 by Ross Daly

Former foes unite to create health-care tech force

Two Long Island firms focused on providing information technology to the health-care sector are merging.

Farmingdale-based Dataline Inc. will become a wholly owned subsidiary of Port Washington's Sandata Technologies Inc. The combined firm will continue to operate for the time being from two offices, although a Sandata spokesman said the firm would eventually look for synergies.

The combined firm will have about 150 employees, with roughly a quarter coming from Dataline. Both companies are privately held; company officials declined to provide revenue or sales figures or merger details.

Sandata provides services to the home health-care and social services sector. Dataline provides monitoring, billing and point-of- care solutions to the municipal and home-health sectors. Both companies provide systems for scheduling visits between caregivers and patients and collect data on the visits from the patients' homes by telephone, reducing cases of fraud. They also provide billing and payroll services.

Dataline chief executive Arnold Link and Chief Operating Officer Don Saporito, along with Dataline's full management team, will join Sandata in key management roles in the newly combined company, according to Bert E. Brodsky, Sandata chairman and chief executive officer.

Link will continue to oversee Dataline's relationship with the New York City Department of Health. He said the two companies have crossed paths previously as competitors, and will be much stronger by joining forces.

Brodsky founded the company that would evolve into Sandata in 1970. Dataline was founded in 1979.

New sleeve blocks 'smart card' data theft

A Uniondale firm has developed lightweight sleeves and mailing envelopes to prevent theft of personal information from radio frequency-based, no-contact "smart cards."

The National Envelope Corporation, the world' largest supplier of envelopes, began developing the "Smart Card Guard" within the past year after concerns emerged about the security of smart cards. The product encloses the card in a thin, metallic barrier with a specially produced substrate, and prevents data in the smart card's embedded integrated circuit from being transmitted via radio frequency waves to a smart card-reading device.

Smart Card Guard testing earlier this year showed the product prevented communication between the enclosed smart card and smart card readers even if the units were placed directly onto readers.

The envelopes offer issuers of smart cards a way to guarantee their customers' privacy, said John Grymes, National Envelopes' chief operating officer. It would be like carrying their card in "a portable lead vault," he said.

National Envelope is targeting financial institutions and governments as its first customers.

There are currently more than 550 million banking and payment smart cards in circulation around the globe, with about 27 million in the United States, according to report this month from Rockville, Md.-based research firm Packaged Facts. Financial institutions are seeking to expand the rollout of smart cards in the U.S. to more than 100 million by 2011.

The U.S. State Department expects to issue 17 million "e- passports" containing no-contact smart card technology this year. Other smart cards include federal ID cards, refillable gift cards, payment cards, health insurance cards, driver's licenses and other state or organization ID cards.

With the smart card boom has come a new kind of crime. A 2006 study by University of Massachusetts-Amherst researchers found that encryption levels on smart cards were not high enough to prevent interception of personal information, and that a device built with off-the-shelf components for as little as $50 could intercept private information in a crowded place by merely passing near a handbag or wallet.

National Envelope has 21 manufacturing plants and 5,000 employees in the United States and Canada, and is one of the largest privately held companies in New York State.

It manufactures about 50 billion envelopes per year.