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Technology Stocks : Check Point Software (CHKP) -- Ignore unavailable to you. Want to Upgrade?


To: Craig Kaltner who wrote (2675)5/26/1998 7:56:00 PM
From: xiangheng xu  Respond to of 7150
 
Any comments on the following article?



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May 25, 1998, TechWeb News

Packaging To Sell Security -- No Web server
stands without a firewall. But vendors and VARs
are finding ways to package firewalls with
services
By William Terdoslavich

Web firewalls today are as common as the bricks that make up their real-life counterparts. And
they are just as necessary. It is unthinkable for a Web server to go up without one. So it is no
surprise that Web firewalls have become a commodity product.

Commodity status implies high supply and low margins, much like monitors or 56K modems. But
vendors and VARs alike are not allowing such a fate to befall Web firewalls.

"There is definitely a marketing war on who is getting the best distribution," said Larry Dietz, vice
president at Zona Research Inc., Redwood City, Calif.

The firewall represents a bundling opportunity as well as a channel opportunity, Dietz said.
"[Resellers] are looking to take the firewall and allied security pieces . . . to promote a total
high-value package for targeted verticals," he said. "If a VAR is astute, he can pick the pieces and
make money as an integrator."

Check Point Software Technologies Ltd., Redwood City, commands the lead in the firewall
market with a 19 percent share, according to Zona's research. Trusted Information Systems,
Glenwood, Md., has 16 percent of the market, followed by Cisco Systems Inc., San Jose, Calif.,
with a 13 percent share. But other players include Raptor Systems, Waltham, Mass.; IBM Corp.,
Armonk, N.Y.; Digital Equipment Corp., Maynard, Mass.; CyberGuard Corp., Fort Lauderdale,
Fla.; Lucent Technologies, Murray Hill, N.J.; Newbridge Networks Corp., Herndon, Va.; and
NetGuard Inc., Fairfax, Va.

The burden is on the vendors to differentiate themselves from each other when offering firewalls
in a commodity market. That differentiation can take place at the feature level or at the channel
program level.

Check Point does both. At the feature level, its FireWall 1 relies on "stateful inspection" to provide
Web security. This involves analyzing traffic flows and discarding data patterns typical of an
attack on the Web site.

"Because we are stateful, we can track what is sufficient for a security decision," said Robert Ma,
director of product marketing at Check Point. Alternative approaches include packet flow, which
does not examine the threat above the packet level, and proxy. "[Proxy] only protects [the system]
if it is spoken to," Ma said. "Therefore, it is slow and not transparent."

Check Point moves all of its product through the channel, said Karen Howard, channel marketing
manager with the company. "Every lead we get becomes a lead for our partners," she said.

Check Point's reach into the market is extended by its OPSEC program. OPSEC stands for open
platform for secure enterprise connectivity. It is an API that partners and vendors can use to
integrate their own products and services with Check Point's product line, said Ma. Check Point
has more than 130 partners supporting its OPSEC program, and another 30 to 40 vendors crafting
products to work with the Check Point platform.

Firewall 1 is priced at $2,995 but can reach as high as $18,000 for an enterprisewide
implementation.

IBM currently offers a comprehensive firewall solution wrapped up in its service unit, which is
sold directly to clients. But change is in the air.

IBM recently announced it is offering service packages encompassing 19 solutions, from planning
and assessment, to architecture and design, to implementation and systems management, said Cal
Slemp, global offering executive for security services. "Most clients are not security experts, nor
do they want to be," Slemp said.

The IBM Firewall is priced from $4,499 to $16,500. "We made this a channel-ready product,"
Slemp said. IBM has 175 resellers that are certified to install the IBM firewall upon referral.

About 70 percent of the business opportunity in Web security is service, Slemp stressed. While
IBM provides those services, resellers are eager to either resell IBM services or provide those
services on behalf of IBM, Slemp said. A reseller program is being considered to that end, but
many details need to be worked out, he added.

Digital is also in the Web security field, with its AltaVista Firewall 98 as well as its AltaVista
Tunnel for VPN. Prices range from $2,495 for 25 users to $14,995 for an unlimited license.

Digital sees the firewall market breaking into two segments. One is a fairly commodity-type market
with a basic firewall and basic service, said Ray Suarez, Internet marketing manager. The higher
end is where companies rely on the Internet to provide their mission-critical communications
infrastructure, he said.

To that end, Digital crafted its AltaVista products to offer separate firewall and VPN servers, but
with fail-over from one to the other if the firewall software is mounted on Digital hardware, Suarez
said.

But the company is also aggressively backing its VARs with joint seminars, joint sales calls, lead
generation and a technical support program, Suarez added. "As we invest in new features, we
become more aggressive in the business programs," he said.

CyberGuard tries to cover its bases with firewalls for Unix and Windows NT. CyberGuard
Firewall for Unix 4.0 does packet filtering and proxy and is priced at less than $5,000.
CyberGuard Firewall for Windows NT 4.0 has a starting price of $1,500.

CyberGuard's VAR program is designed to strengthen the product line. VAR training gives
resellers the ability to architect Web security systems or the knowledge to sell CyberGuard's
services to do the same, said Katherine Hutchison, vice president for strategic operations with the
company.

CyberGuard provides certification for E-commerce solution providers, basically resellers that can
build E-commerce solutions using CyberGuard's product line, Hutchison said.

Opting for simplicity, NetGuard jumps into the market with its Guardian firewall, a Windows
NT-based solution priced from $3,980 to $8,980.

Guardian's selling point is that it was crafted from the ground up to be a Windows NT-based
solution, operating at the machine level behind the NIC, said Pete Jacobs, vice president of
marketing and strategic planning at NetGuard. "Many [firewalls] start as Unix and then get ported.
NT-from-Unix firewalls are already cludgey," he said.

Guardian was built with simplicity in mind, with configuration limited to a series of yes-no
questions, Jacobs added.

NetGuard is busy building up its VAR program. "We don't want 10,000 resellers out there. We
are looking for 50 qualified VARs. We have 22 right now," Jacobs said.

Copyright r 1998 CMP Media Inc.

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