All,
Microsoft moves into fire-wall software arena--just as we suspected.
The following is from Monday's IBD:
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Tech Heavyweights Lumber Into
The Net Security Arena
Date: 7/14/97
Author: Pardhu Vadlamudi
In the real world, a firewall helps prevent the spread offire. But in the virtual world of the Internet, firewall software is intended to keep corporations from getting burned.
Threats to corporate Web sites range from curious snoops to well-organized hackers.
An Internet firewall is a security tool that limits access to a Web site. It also can help protect a firm's entire network from intruders entering via the Web site.
A core group of firewall start-ups has jumped ahead in the market. The question now is whether they can withstand the emerging competition from established software and networking titans.
Some market observers also wonder whether firewalls will continue to be sold as a separate product. They could become a network operating system add-on.
Industry heavyweights Microsoft Corp. of Redmond, Wash., and Cisco Systems Inc. of San Jose, Calif., could both become formidable foes for firewall vendors.
''Are these companies cannon fodder for Microsoft? The answer is no,'' said Paul Merenbloom, an analyst with Prudential Securities Inc. in New York. ''I do not believe Microsoft will control the market, but Cisco's entry into the market is (more threatening).''
He added: ''These smaller firewall companies) have undergone successful IPOs in the last 12 to 18 months and they have to put the resources to good use.''
There are differing opinions on the size of the firewall market. Zona Research Inc. of Redwood City, Calif., estimates annual sales of $103 million for firewalls in '96. International Data Corp. of Framingham, Mass., says revenue grew 37% to $220 million last year.
IDC predicts revenue will grow to more than $700 million by 2001. Zona is more cautious. It says sales will hit
$230 million by 2000.
''Everybody's throwing up Web sites and they realize they have to protect the server,'' said IDC analyst Ted Julian.
The top firms in the firewall market include Check Point Software Technologies Inc. of Redwood City, Calif., Trusted Information Systems Inc. of Glenwood, Md., Raptor Systems Inc. of Waltham, Mass., and Secure Computing Corp. of St. Paul, Minn.
Check Point Software leds the firewall market in '96 with a 46% share, according to IDC ee chart).
But Check Point and the other firewall vendors are facing a raft of new competition. Microsoft recently announced plans to enter the firewall market. The company has added firewall security features to the next version of its Proxy product, a Web server program
based on Windows NT that's undergoing testing.
''Microsoft is a big force in the marketplace and they can put in hooks to the operating systems,'' said Larry Dietz,
a Zona analyst.
Meanwhile, Cisco shipped firewall products for the first-time last year. And it recently acquired additional firewall technology.
The networking giant last month bought Global Internet Software Group, a unit of Global Internet.Com Inc., based in Palo Alto, Calif., for $40 million. Global's Centri firewall software is designed for small and mid-sized businesses and will be added to Cisco's Private Internet
Exchange (PIX) firewall product line.
''Cisco is already a major player, and the acquisition of Global Internet gives them an NT product,'' said IDC analyst Julian.
''Cisco in a year has established significant marketshare with the PIX product line,'' said Prudential analyst Merenbloom. ''With the recent acquisition of Global Internet, Cisco recognizes the potential of the NT marketplace.''
Many of the small firewall companies have followed the corporate migration from the multiflavored Unix platform to the Windows NT operating system. Even though many large corporate sites still rely on Unix, more small to mid-sized businesses now run their networks on
Windows NT.
''People are deploying intranets on NT,'' said IDC'sJulian. ''NT is the high-growth portion and the largest
segment of the market.''
In addition to Microsoft and Cisco, International Business Machines Corp., Armonk, N.Y., and Hewlett-Packard Co., Pao Alto, Calif., also are developing firewall software. IBM and HP are not expected to become direct competitors because they already have partnerships with the firewall vendors.
Firewall software is being packaged as a full corporate security system. Both HP and IBM resell firewall products from Check Point and Raptor. Trusted Information Systems has partnered with Microsoft to
develop security tools for the software giant's Web
server products.
''Cisco is clearly a competitor, but IBM and HP are partners (to the smaller firewall players),'' said Mike Rothman, an analyst with research firm the Meta Group, Stamford, Conn. ''Cisco is going after Check Point, TIS and Raptor in the channel and the high-end.''
Analysts say competition from the larger companies will accelerate the consolidation in the firewall market. They say to survive security firms must broaden their product lines beyond a single security product like a firewall.
''Consolidation is inevitable, and I'm surprised we haven't seen more of it,'' said Prudential analyst Merenbloom.
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Ibexx |
