Picking Up The Pace

Check Point Software Technologies Chairman and CEO Gil Shwed is determined to transform the company he co-founded 11 years ago from an enterprise firewall kingpin into an end-to-end security company with a robust small- and midsize-business lineup.

A big step in that initiative comes this week with the expected close of Check Point's $205 million cash-and-stock acquisition of Zone Labs.

Zone Labs, whose ZoneAlarm product makes it one of the leaders in the personal firewall market, plans to strut its stuff at the RSA Security industry gala this week with the announcement of its Integrity 5.0 enterprise product, a new version of its end-point security solution featuring enhanced integration with Check Point's firewall.

>> Check Point's Aggressive Product Introductions Are Fueling Partner Gains In Every Segment Of The Security Market From Small Businesses All The Way To The Enterprise

Shwed and his team, including Check Point President Jerry Ungerman and Zone Labs co-founder and CEO Gregor Freund, call the Zone Labs deal a watershed event. "The real core point of this acquisition partnership is to build an end-to-end security solution,from an individual PC all the way to the perimeter," said Freund.

With a slew of new products in their arsenal, Check Point's partners say they expect a big year. Compuquip Technologies, a Miami-based integrator and Check Point Platinum partner, expects its Check Point business to possibly double this year. This, after the integrator tripled its business with the vendor in 2003.

"Check Point has brought a whole new wave of technologies to the market that is rejuvenating the channel," said Brad Reed, director of Internet security at Compuquip. "We are pumped up. They are absolutely on fire right now."

Reed said he is looking forward to the integration of the complete Zone Labs lineup with Check Point products. He said Check Point's channel program is best-in-class and the margins on its products are well above those of rival security vendors.

Among the rivals competing against Check Point, Redwood City, Calif., in one segment or another are Computer Associates International Symantec, Cisco Systems, NetScreen Technologies, Network Associates (which is also co-developing a product bundle with Check Point), and even up-and-comers, such as TippingPoint Technologies. Those players are all pressing forward with acquisitions and new products to gain a bigger footprint in the security game.

But they face a revved-up Check Point, which has promised new Web and remote-access solutions as soon as the second quarter. One of those is an SSL VPN that Check Point claims goes a step above competitive offerings by providing integrated authentication and content verification. What's more, Check Point is also slated to come out in the second quarter with an integrated managed firewall/antivirus offering as part of its joint product effort with Network Associates.

All this activity comes on top of four new product offerings in the past six months. They include a highly acclaimed Interspect internal network security gateway, a VPN-1 Edge network appliance that provides secure connectivity for remote sites, a fast-growing Check Point Express midmarket offering, and even a small-business offering called Safe@Office. The Express midmarket offering was the company's fastest-selling product in the fourth quarter.

Partners say the Check Point of the past several months is a far cry from the Check Point of a year ago. Ungerman himself admits the company "may have lost touch with the channel" a year ago. But with the new product blitz, the complaints from partners are gone, he says.

Ungerman said Check Point recruited 400 new partners in the small-business segment of the market last year. "If we're going to add anybody, they're going to have to go after true small business," he said. "And when they sign up, we're limiting them. We're working with our distributors as to what class of partner gets access to what kind of products."

Still, Check Point has only several thousand partners compared with the tens of thousands of partners lined up behind competitors such as Cisco and Symantec. Cupertino, Calif.-based Symantec, which has been on its own security acquisition binge, and San Jose, Calif.-based Cisco, which acquired end-point security player Okena last year, won't talk about what new products they have up their sleeve to counter Check Point's full-court press.

But rivals maintain that Check Point doesn't have the right formula in terms of product or partners to beat them. Some even say that Check Point may have bitten off more than it can chew with the Zone Labs deal.

(l. to r.) Gregor Freund, CEO and co-founder, Zone Labs; Gil Shwed, chairman and CEO, Check Point Software Technologies; Jerry Ungerman, president, Check Point

Chris Roeckl, director of corporate marketing at Sunnyvale, Calif.-based NetScreen, which is in the process of being acquired by Juniper Networks, said the Zone Labs personal firewall product is outside Check Point's field of expertise. Roeckl said he has heard the talk about a Check Point SSL VPN product introduction for many, many months but has yet to see a real product. "The proof is in the pudding," scoffs Roeckl. "Let's see it."

NetScreen, meanwhile, will turn up the heat in the next two months with the rollout of a new appliance that combines firewall, VPN and intrusion prevention. The product is the culmination of two years of development on a new hardware platform that combines the multiple security functions on a single system without compromising performance, said Roeckl.

For its part, Network Associates sees Check Point as both a partner and competitor in certain segments, said Ryan McGee, director of product marketing for McAfee at Santa Clara, Calif.-based Network Associates, which has 2,600 U.S. partners. Network Associates' strategy is to combine firewall, desktop antivirus and intrusion prevention in a single offering, said McGee.

The first step will come in the third quarter when Network Associates comes out with a new version of McAfee Virus Scan that will feature some firewall and intrusion-prevention functionality. The company also is planning a new release in the third quarter of its Entercept intrusion-prevention product that will have some firewall functionality. The single product vision is expected to come to full bloom early next year, he said.

TippingPoint, meanwhile, claims it is taking a radically different approach with what it calls a next-generation, high-speed ASIC and network processor-based UnityOne intrusion-prevention system. Last week, TippingPoint unveiled an alliance under which industry giant Dell has become a strategic reseller partner. TippingPoint CEO Kip McLanahan charges that Check Point is going to have trouble particularly at the "core of the network where throughput and bandwidth requirements are much higher." TippingPoint, which is showing off its wares at the RSA show, claims its approach protects bandwidth, performance and network infrastructure as well as applications at layers 2-7.

Check Point's Shwed, a security visionary who helped pioneer the firewall market, says simply that no one has a more robust security offering than Check Point. "We do security infrastructure, not the cheaper, faster implementations," he said. "We do the real security."