Bucking A Down Economy

Security solution providers report strong fourth-quarter sales

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A number of security solution providers are posting strong revenue gains despite the downturn in technology spending.

Guardent, a three-year-old Waltham-based managed security service provider and consultant, expects to double its sales this year to about $30 million, up from $14 million in 2001, said Dan McCall, co-founder and executive vice president.

"We're on a pretty aggressive growth curve, and business is going extremely well for us in the managed services area," McCall said. "We're topping out with about 1,000 devices under management. We've hit a real critical mass."

'Business is going extremely well for us in the managed services are.' -- Dan McCall, Guardent

McCall and two other company co-founders recently were named New England Regional Winners of the 2002 Ernst and Young Entrepreneurs of the Year competition in recognition of record growth in revenue and customer base.

FishNet Security, a six-year-old security specialist in Kansas City, Mo., has seen its sales grow 30 percent this year, said Gary Fish, CEO of FishNet.

Fourth-quarter sales appear to be strong, he said, adding that although profit margins on security products are down this year, FishNet is pushing ahead with more services.

FishNet is a "best-of-breed" security integrator supporting a wide range of products from vendors including Check Point Software Technologies, RSA Security, Trend Micro and Websense. FishNet also has its own software package that manages policy revision and control.

@Stake, a 120-person Cambridge, Mass.-based security consulting and applications company, has seen steady growth this year, mostly on the applications side of the business, said Chris Wysopal, director of research and development at @Stake.

"Network security is sort of a commodity," Wysopal said. "We've seen a huge amount of growth in our applications business, which is probably 50 percent of our business now."

Icons, a five-year-old security solution provider in North Brunswick, N.J., also has seen strong growth in applications security, said Paul Rohmeyer, COO of Icons, whose top vendor partner is Symantec.

Icons has also seen strong growth in enterprise security architecture planning and design, Rohmeyer said. "We definitely see an increase in the fourth quarter," he said of the market outlook.

Conqwest, a Holliston, Mass.-based security integrator, is posting gains, but not as dramatic as in the past several years, said Michele Drolet, CEO of Conqwest. That said, there is "more services opportunity right now than we've ever seen before," Drolet said.

The IT spending downturn has made it easier to hire talented executives, Drolet said. For example, Conqwest has hired three executives from now-defunct Global Crossing.

FishNet has hired six engineers from competitors. "This is the first year I have been able to hire talent away from competitors," Fish said. "Before, a lot of people were bound by very strict non-compete [agreements."

Guardent is also seeing a "relatively easy climate" in terms of hiring engineers and consultants, McCall said. Guardent's consultants have 11 years of experience on average, he said, noting that the company is extremely selective when it comes to bringing in new talent.

The one area where it has been difficult to hire talent is operational security, including intrusion detection, he said. "The people who really get it when it comes to firewalls are in very high demand," McCall said. "In fact, we're seeing people poaching our people because we've trained them and they are really, really good. Some companies are coming in and offering them what constitutes obscene salaries, given some of [their experience levels."

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