Tuesday, February 12, 2013

Riverbed Leaves Others in its Wake for Gartner Magic Quadrant for WAN Optimization Controllers

Gartner has released  their Magic Quadrant for Wan Optimization Controllers ID:G00219270.  Only three companies made it into the Leaders portion of the magic quadrant, Riverbed, Blue Coat Systems, and Silver Peak.  Gartner.  Riverbed led the other two companies by a great deal from the perspective of Completeness of Visionand Ability to Execute.  Silver Peak and Blue Coat were practically on top of one another with Citrix close by in the Visionary area of the Magic Quadrant.  and Ability To Execute.

Cautions for Blue Coat included stagnant revenue, being late with features, and management churn.  This makes it sounds as if their acquisition by Thoma Bravo for $1.3 billion in mid February 2012 has yet to payoff.  Cautions for Silver Peak Systems included lacking application specific optimization and lacking in some capabilities for mobile and home office workers.

Gartner praised riverbed for having the “broadest set of capabilities in the industry” and being one of the most innovative companies in the market.

Riverbed is currently trading at around $16.  Far off its high of around $30 in March 2012.  It bottomed out around $13.30 in July. Riverbed's financial report published in early February was mixed.  Total GAAP revenue for Q4’12 was $237 million, up 9% compared to the third quarter of fiscal year 2012 (Q3’12)   for the full year 2012, GAAP revenue was $837 million, up 15% compared to 2011 GAAP net income for Q4’12 was $5 million.  This compares with $20 million, in Q4, 2011.   

However, Riverbed  captured more than 52% share of the worldwide Advanced Platform WAN optimization market share based on vendor revenue for the third quarter of 2012 per Gartner’s according to Gartner’s  report titled “Market Share: Application Acceleration Equipment, Worldwide 3Q12” December 2012.

So the revenue trends are in the right direction.  Now about that reduction in net income?

Overall, with respect to their main competitors in the Magic Quadrant.  Their position is golden compared to Silver Peak.  Their growth in 2012 probably has Blue Coat singing the blues.  Riverbed is well positioned for 2013. 

How Do You Use A Gartner Magic Quadrant?

The below is from a Research Methodologies piece on utilizing Magic Quadrants.  Too often, a pic of the quadrant will make its way onto a slide deck with no explanation.

Clients use Magic Quadrants as a first step to understanding the technology providers they might consider for a specific investment opportunity.  Keep in mind that focusing on the leaders' quadrant isn't always the best course of action.  There are good reasons to consider market challengers.  And a niche player may support your needs better than a market leader.  It all depends on how the provider aligns with your business goals.
 The five other companies in the WAN Optimization Controllers Magic Quadrant are probably pleased about the above.

RSA 2013 San Francisco - Where the World Talks Security

The RSA 2013 San Francisco security trade show  takes place  at Moscone Center February 25 through March 1.  “Where the World Talks Security” is the theme of this year’s show.  http://www.rsaconference.com/events/2013/usa/index.htm
Near the bottom of this blog is information on getting a free RSA  pass (exhibition hall) from Ahnlab, Zscaler, or Sophos.

The show has grown in size, with over 350 companies exhibiting.  The exhibition hall area will be open Tuesday through Thursday from 11am to 6pm (3pm on Thursday) for individuals with a full conference pass; there will be 275 different sessions to attend across 22 tracks.  Threats are evolving.  The cyber criminals are getting more creative. 

Up until several years ago, if you said “APT”, the brightest people in the room would say, “Advanced Placement Test.”  Now they are saying, “Advanced Persistent Threat.”  A number of security pundits are saying that traditional defenses are ineffective against today’s more sophisticated threats.  Here is your chance to learn about what companies are doing to protect individuals and companies against these. 

A number of security vendors may not have booths.  Look for stealthy meetings to be held at the bar area at the W Hotel, and way too many luncheons to at the Thirsty Bear Brewery on Howard street.  Some stealthy meetings may be held as far away as the Clift Hotel. 

For those just going for the exhibits, a great number of vendors always have   presentation theatres in their booth areas.  These can be quite educational, as well.  Exhibition pass holders are able to attend the keynotes Tuesday through Friday, I believe.  There are a number of keynote addresses at RSA 2013.  The final keynote this year will be 66th Secretary of the United States, Condoleezza Rice, on Friday afternoon.   Go to the RSA site to learn about what talks are being give, and who the other keynote speakers are. 

Thursday is the least crowded day in the Exhibition Hall, as vendors will go through the ceremonial exchanging of the tchotchkes with other vendors.  Before going on your own personal tchotchke run, ask yourself, “Do I really need another 15 trade show tee shirts?”  If you do not attend on Tuesday, you will miss the libations being served during the last hour on the first day the exhibition hall is open.

Sponsors for this Year’s RSA 2013 San Francisco

Global Diamond Sponsors – Microsoft, Symantec, and RSA.  Global Platinum Sponsors, Akamai, and Qualys, Global Gold Sponsors – FireEye, splunk, and SafeNet, Platinum Sponsors – Cisco, McAfee, HP, and TrustWave.  There are also Gold and Silver sponsor levels as well.  Visit their booths. Travel the perimeter to view products from companies who lack the budget of the larger companies, may just be starting out, but may also have great products.    

This is your chance to attend a talk by a smaller vendor, then go to a larger vendor and ask, “Can you do A, B, and C?  This smaller vendor can.”    Asking a larger vendor why their products didn’t test as well on the tests performed by  www.virusbtn.com , www.AV-Test.org   and www.AV-comparatives.org  will not get you to the front of the line for any booth giveaways.  At the show, you may be able to view products that range from not so hot, to avg,  to pretty incredible.

Award Events Not Affiliated with RSA But Being Held That Week

SC Magazine will be presenting their SC Awards 2013 Reader Trust, Excellence, and Professional Awards   at a dinner on February 26. There are  over 34 categories this year.  To see a list of some of the finalists, go to http://kensek.blogspot.com/2012/02/sc-magazine-awards-2012-winners_29.html
Info Security Products Guide will be presenting their 2013 Global Industry excellence awards at a dinner on February 27.  To see a list   of the finalists for this award, go to http://www.infosecurityproductsguide.com/excellence/index.html
For the recipients of either these awards - Bragging rights, Product and company recognition, Marketing and promotion opportunities, Logos for their web site.  With a fair degree of certainty,  rest assured that those who have won the previous year but not this year, will not quickly be removing their logos from the web.   sites.

Free Pass – RSA 2013 San Francisco

Entering FXE13AHN at the link below will get you a free RSA 2013 exhibition hall pass.  Stop by the Ahnlab booth, learn about APTs, and tell Ahnlab  thank you.  FX13SPH at the link below will get you a free RSA  2013 exhibition hall pass.  Stop by the Sophos booth and tell them thank you.  As will FXE13ZSC.  Stop by the Zscaler booth and tell them thank you. Expires February 22.

Sunday, February 10, 2013

Whole Product Dynamic Real World Protection Test – December 2012

It’ll be a few months before AV-Comparatives has a multi-month compilation for this test.  For the month of December though, Trend Micro topped all vendors with a score of 100%.  Congratulations to them!

The top five for the month were:

  1. Trend Micro
  2. BitDefender
  3. F-Secure
  4. G Data
  5. Kaspersky

Among the best-known vendors known for their freemium products, Avira topped the field.  For the freemium vendors:

09. Avira  
14. Avast (Wins bragging rights for the Czech Republic for the month)
16. Panda
17. AVG Technologies
19. PC Tools (owned by Symantec)

As always, the Whole Product Real World Protection Test is one test.  Individuals or companies evaluating the ability of products to detect and capture malware should visit www.av-comparatives.org , www.virusbtn.com , and www.av-test.org    to view the results of other tests.  These   organizations   use relatively large samples in testing, which improves the legitimacy of the results.  All are more valid than the number of likes on a Facebook fan page.  There is more to product quality than a number of "likes" on a Facebook fan page.

Webroot isn't fond of most real world tests, commenting in a July blog “Webroot Bulletin Regarding AV-Comparatives Results" that,  "Currently most “Real World” tests rely on automation and AV scanners are only given a single chance at detection before the test system is reverted for the next round of testing.  Unfortunately this testing model doesn’t give WSA a chance to leverage our unique cloud approach as it has a very static view of the files being tested.”  They also stated that, "Webroot continues to drive innovation in our products though this isn’t always met with equal innovation in the testing process."  To read the complete blog, go to, http://blog.webroot.com/2012/07/19/webroot-bulletin-regarding-av-comparatives-results/

About AV-comparatives     www.av-comparatives.org

AV-Comparatives is an Austrian Non-Profit-Organization, which is providing independent Antivirus software tests free to the public.  Go to their website to view all the great comparative reports and surveys they publish.  

Monday, February 04, 2013

AVG Technologies - IPO One Year Birthday. Growth Curve or Ski Slope for 2013? Forbes versus Seeking Alpha Contributors

AVG Technologies has now been public for a year.  Their IPO (Initial Public Offering) took place in early February, 2012,  The stock   closed around $13.08 on its opening day last February  on Nasdaq  after targeting an opening day price at $16 plus.   The stock closed  on February 2, 2013  at  $13.14.  These two figures represent a one-year return of 0.38% excluding transaction costs and any dividends paid.  For the first 9 months of their fiscal year, AVG Technologies  revenue was up, but net income was down (not good as a trend).   Over the course of the year, AVG had a low of $9.42 and in December, had a high of $16.38. They have toolbar  deals with both Google and Yahoo.

 A Motley Fool Perspective - February

One worries about the thoroughness of AVG's protection, however, when one sees they've not been very thorough in safeguarding their finances. Current ratio is a quick-and-easy indicator of a stock's health, especially for a smaller company such as AVG which may lack the resources to bail itself out in the long term. With a current ratio of 0.7, AVG is struggling.
But T.M., you might say, AVG could be using its profits to expand, research, etc. etc. Their declining margins,  however, tell another tale: one of a company whose long-term solvency and profitability is in doubt.


So what do Forbes contributor Jim Oberweis and Seeking Alpha contributor Eiad Asbahi see for the company? 

3 Slow Growth Small-Caps with Big Potential – Forbes 

Forbes’ numbers are inaccurate in the article.  AVG Technologies has more than 110 million computer users.  While they have been losing share, according to Opswat, they claim an active user base of 143 million users.  Some of this is attributable to 25 million copies of their Internet Security Suite (the paid) product given to purchasers of Huawei (Yes, that Huawei) mobile devices, in India.  

Forbes contributor Jim Oberweis likes AVG for the company’s PEG ratio, growth prospects, and the fact that the free product received a PC Magazine Editor’s choice award.  He likes the Google relationship. See links at the bottom of this blog for relative rankings of the paid AVG Antivirus and AVG Internet Security  solutions. The print article will be in the February 11 issue.

AVG: Feb 1st Google Policy Updates Threaten AVG's Growth Engine, Signals Steep Downside

In a  January 31 Seeking Alpha article,  Seeking Alpha contributor Eiad Asbahi is forecasting a share price of $8.50 to $10 per share (elsewhere in the analysis, the figures are $7.30 to $10.28).  This is based on an extensive quantitative analysis based on a supposed change that will be occurring in Google’s toolbar policy.   

According to the article, “Google (GOOG), AVG's primary search partner and currently the source of substantially all of AVG's Platform-derived revenue, is on the verge of announcing an update to its toolbar policy, something that has not been widely followed or discussed by market participants.”  This would require companies to make use of “opt-out” instead of having “opt-in” checked automatically on the customer’s behalf.  Opt-in has been a point of consternation among many users of many software packages.

In the article, he mentions Yahoo CEO Marissa Mayer was asked about this policy change.  Her response,   "On the Toolbar change from Google, we'd be remiss to offer comment on another company's product, so I'm not going to comment further there.”  AVG Technologies has a toolbar  agreement with Yahoo as well as Google. Previously, they had been exclusively one company or the other.

Asbahi did some number crunching based on different churn rates for users prior to and after February 1, 2012, an opt-in rate of 65% and per user revenue from Yahoo search bar users at 50% of Google tool bar users.  After all of his number crunching,  his estimates for AVG Technologies 2013 revenue to be between $248M and $287M,  an “ implied market capitalization and target price would between $399M and $569M, or $7.34/share and $10.28/share respectively.” On CNETs download site, AVG averages around a million downloads a week, suggesting major churn.

From a November 1 Financial Times blog,  “J R Smith, chief executive of AVG, admits that being the first in the industry to offer free products has “kind of put us a little bit in a box”, but slowly the company is succeeding in convincing investors that AVG has evolved from offering just hardcore security into other services and platforms”  http://blogs.ft.com/beyond-brics/2012/11/01/corporate-watch-avg-breaks-out

AVG made a buy versus make decision regarding mobile security in November 2010 with a $4.1 million acquisition of Droidsecurity to gain entry into mobile security market. 

AVG Technologies should be reporting their earnings on February 21.    
For some comparative reviews of paid antivirus and internet security products by PC Magazine, go to:

About OPSWAT www.opswat.com    

Founded in 2002, OPSWAT is the industry leader in software management SDKs, interoperability certification, and multiple-engine scanning solutions.

OPSWAT market share reports are available at http://www.opswat.com/media/reports