Big Mike:
You have some valid points, but you also fail to look deeper into the strategy. First of all, you're absolutely right -- Cisco and other networking vendors potentially present significant competition to the security market as a whole. The same threat holds with Microsoft. However, security embedded in routers, switches, operating systems, servers etc. generally provide minimal defense. The security vendors are providing products that are additive, not substantive. The real issue is the level of security that Cisco et. al. set as minimal. The job of the security vendors is to develop products that provide a significant amount of defense above and beyond these system and network providers. I think (true, I don't KNOW) that NETA will invest R&D in the TIS Stalker product to address intrusion detection.
Second, you must look at how the company will leverage the "old" products to create selling opportunities. Saying that virus protection and firewalls are commodities is a bit extreme. I think we would all agree that there is still money to be made in these markets as there will always be new viruses and new ways to hack through firewalls. The real value comes in when selling these and other products together. The much heralded "single point of contact" arguement is fairly valid. Customers want to deal with as few vendors as possible. In a fragmented security market, there are few, if any, vendors who provide a total security solution. I think NETA is well-positioned in this regard, and as they develop/acquire more technologies that address the other security concerns, they will hopefully emerge as one of the dominant players. This dynamic will take several quarters or perhaps years to pan out, but I think NETA has the inside edge on the others in the market.
-Ranch Up |
