CRN Interview: Robert Thomas, NetScreen

NetScreen Technologies, a Sunnyvale, Calif.-based maker of firewall/VPN security appliances, last month celebrated the first anniversary of its IPO. CEO Robert Thomas spoke recently with West Coast Bureau Chief Marcia Savage about the company's goals and channel, as well as the evolving security market.

CRN: What is NetScreen's strategy moving forward?

THOMAS: We've got to add some other pieces of the security ecosystem so that customers can buy a more complete solution from one company. Buying OneSecure in the intrusion-prevention space was one of the things we did in that area. We intend to sell their products as stand-alone devices and also integrate their technology into our firewalls so that in about 12 months we'll have a whole different range of security appliances and gateways that uplift security levels dramatically.

CRN: What is your channel strategy?

THOMAS: About 90 percent of our business is [through indirect sales]. We've adopted a very different channel model than our competitors. We haven't gone for broad-based distribution through Tech Data and Ingram [Micro] and so on. We're purposely underdistributing to make sure our VARs truly add value and make very good margin on our products.

CRN: Any changes ahead in how you work with the channel?

THOMAS: We're not going to change the underdistribution model. We will change some of the ways in which we compensate our VARs. For example, in the not-too-distant future we'll roll out a program that helps VARs identify and sell to some of the larger Fortune 500 companies with extra assistance from us. We have some targeted accounts we believe we have a great chance to win, and there are some channel partners we think can help us improve our chances of winning [those accounts]. We're going to put in place something that protects their interest in those accounts and rewards them in a different way. It sounds a bit nebulous, but we haven't announced it yet, and we don't want to give away too much to the competition.

CRN: Can you elaborate on your product development?

THOMAS: As people put a lot of security products in the field, the management of our products becomes increasingly important. A lot is going on [to make management] simpler and more powerful and to integrate intrusionprevention management into firewall management and VPN/traffic management. All of those elements will have a single management platform by the middle of next year. The second thing is that we'll add other technologies in the application security area. So apart from intrusion prevention, there are other things we can do to secure applications by getting away from layers 3 and 4 and deeply into Layer 7. You'll find other types of deep inspection technology incorporated into our products over the next 18 to 24 months that secure applications in a much better way.

CRN: Can we expect to see more acquisitions?

THOMAS: I would never say no. We need to complete [the OneSecure acquisition] and make sure it's done well. We believe time-to-market is more important than homegrown stuff, so we're not wedded to developing everything ourselves. The most important thing in an acquisition for us is that we want to deliver stuff that's best-of-breed. We don't want to do what Symantec does, where you buy one little box and it's got seven or eight different types of security technology in it and you don't end up with anything best-of-breed. In the markets we sell to,large enterprises and service providers,best-of-breed [solutions] are still very important.

CRN: What do you see as the future of the security industry?

THOMAS: We believe that security will be pushed more into the networking infrastructure,that it'll be embedded deep in the network so you end up with a secure network being delivered and people just adding applications on top of that. You'll see more networking capabilities built into our products. We won't become a switching and routing company, but there is a lot of routing built into our products today. Security will be a network-based feature rather than a bolt-on thing.

CRN: What are NetScreen's key challenges?

THOMAS: We've been fortunate to grow in a lousy economy, but the economy is still a challenge. The competition is something we always worry about. We've been good at keeping 18 months or so ahead of them in all respects. Apart from that, the security market is going to remain quite robust and will get even more robust as IT spending picks up in the application areas.