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At the Check Point Experience (CXP) 2006, held at Bangkok, the company had little reason to announce any drastic changes in its business plans. So, Bill Shwed, founder, chairman and chief executive officer, Check Point Software Technologies went ahead and claimed the obvious: Check Point was one of the few remaining pure-play security vendors left in the world. Shwed insists, “We believe security is a layer in itself. It is not just something that can be dumped in the network, or in the router or a switch.”
With security strategy getting integrated into the plans of most networking equipment vendors; and Check Point grossing only about half a billion dollars in FY 2005, the company's claim may not sound impressive. But even with its relatively meager revenue, the company had profits in the range of 55% for FY 2005 ($579 mn in gross revenue and $319 mn in net profit). But pure-play tag labels the company in more ways than one, in some cases much to the disdain of the company. The company sometimes faces a steep challenge in breaking out of the mould of a firewall-only company. So, Shwed was keen to point out, “Everything we sell is VPN. It may have firewall capabilities, but it is VPN. The main client is called VPN 1. I believe that of the new product sales, it is about 70%, in revenue terms.”
The growing importance of India, in Check Point's plan is also not a new thing. Check Point India is ahead of its Chinese counterpart in terms of new sales, as well as installed base. The growth is also reflected in its growing India team, from one to six persons in about a year, “With potential for more,” according to Jerry Ungerman, vice-chairman, Check Point. Scott Ferguson, regional vice-president, ANZ and South Asia added that companies like “Bharti and BSNL pushing out their ADSL strategies, rolling broadband to the business and the home” their data business would grow, obviously expanding the market for Check Points products. On a global level too, “The growth is getting some good traction in the medium business market. The challenge for the future is to perform well that is where the growth will come from,” said Ferguson.
However, not everything went as per the plan of the company. Having realized that IPS/IDP was the missing piece in its security offerings, the company last year was on the verge of acquiring Sourcefire. US regulators, which did not want the company's 'critical' technology in 'foreign' hands, scuttled the deal. Despite that, Shwed said they were open to a licensing deal with Sourcefire. However, Sourcefire has recently teamed up with Nokia to provide intrusion prevention. Nokia has had a long relationship with Check Point, and the deal could effectively put a question mark on the company's plans of a licensing deal with Sourcefire.
Shwed, however, says that despite the Sourcefire imbroglio, the company is committed to acquire the IPS capabilities by OEMing or even by acquiring other companies. The conclusion is simple. Check Point is on the prowl again, and depending on their inclination, small security vendors either need to watch out, or make sure that they are watched.
Alok Singh
The author was hosted in Bangkok by Check Point
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