Palo Alto Networks Tosses the Gauntlet at Check Point Software Technologies

Palo Alto Networks is offering a $2,000 PA-2000 Next Generation Firewall (NGFW) appliance to qualified companies who take a meeting with them to discuss their solutions.  They also have a series of Five TechBuster videos comparing their NGFW’s to Check Point's products. These videos include Episode 2,  “Check Point Firewalls Have Better Price/Performance than Palo Alto Networks", and Episode Five,  “Check Point Application Control is as Easy to use as Palo Alto Networks”.  You have to love it when the 800-pound gorillas go mano a mano.  You also wonder what SonicWall is saying on the sidelines about all this. 

http://www.paloaltonetworks.com/cam/techbusters/pa-200/

According to Palo Alto Networks, the Palo Alto Networks™ PA-200 is targeted at high-speed firewall deployments within distributed enterprise branch offices.  The PA-200 manages network traffic flows using dedicated computing resources for networking, security, threat prevention, and management.

Palo Alto Networks outperformed  Check Point Software Technologies on the NSS Labs 2012 Next Generation Firewall Value Map.  This report was released during RSA 2012, San Francisco.  It is available online.  The report measures Block Rate versus Price per Protected-Mbps.  SonicWall also outperformed Check Point. 

 http://kensek.blogspot.com/2012/03/sonicwall-palo-alto-networks-top.html

 

What’s a little Next Generation name calling between friends? Particularly when the Palo Alto Networks founders came from Check Point.

Palo Alto Networks reported their fiscal Q1 2013 revenues during the first week of December.  Total revenue for the fiscal first quarter grew 50 percent year-over-year to $85.9 million, compared with $57.1 million in the fiscal first quarter of 2012.  They suffered a GAAP net loss for the fiscal first quarter of $3.5 million.  The market wasn’t pleased.  The stock fell below $47 shortly after the announcement after peaking around $72 in early December. 

 

It'll be a battle in  2013 in the NGFW marketplace.   SonicWall, owned by Dell,  has NGFW products that extend to the enterprise.  Fortinet has been claiming since January that they have the world’s fastest firewalls.  While Fortinet had a high Block Rate in the NSS test, their Price per Protect Mbps was the highest of any company’s product tested, with the exception of Juniper Networks.

Fun and Excitement on the Next Generation Firewall Front

The Next Generation Firewall (NGFW) market place  is getting a little more exciting these days.  NSS Labs  has released their NGFW Comparative Analysis 2012.  It’s available on their website for $3,500, pre coupon!

Key Findings of the   NSS  NGFW Comparative Analysis 2012  Report

1. Few NGFWs are ready for “prime time”: Only 50% of the NFGWs tested scored over 90% in security effectiveness vs. 75% of major IPS vendors in the dedicated IPS group.
2. Convenient configurations mean less protection: NSS Labs research shows that IPS features in NGFWs are seldom tuned and the devices are often deployed using vendors’ default or recommended policy settings, creating significant gaps in coverage between NGFWs and dedicated firewall and IPS devices.
3. Vendor claims are often exaggerated: Of the eight  products tested, five performed well below vendors’ throughput claims.  Maximum connection rates were lower than preferred in all products tested - revealing a major concern; NGFWs must improve performance before they are ready for large enterprise deployments

This Comparative Analysis Report  2012 consists of five sections, covering the following topics in-depth: Security Value Map (SVM), Security, Performance, Management,   and Total cost of ownership (TCO).  

Tested Products

•     Barracuda F-900
•     Check Point 12600
•     DELL SonicWALL SuperMassive E10800
•     Fortinet FortiGate 3140B
•     Juniper Networks SRX 3600
•     Palo Alto Networks PA-5020
•     Sourcefire 8250
•     Stonesoft FW-1301

Only two products were positioned in the Leaders portion of the December 2011 Gartner Magic Quadrant for the “Enterprise Network Firewall”.   Gartner takes great care to explain that products in other portions of the Magic Quadrant  can be best for a given customer.

NGFW Events  over the Last Several Months

In early July, Dell SonicWALL announced that their NGFW appliance was the first   to receive NGFW certification. SonicWall was a top performer on the NSS Next Generation Firewall Security Value Map.

https://www.icsalabs.com/press-release/dell-sonicwall-receives-first-next-generation-firewall-evaluation-icsa-labs

In early October, Barracuda Networks  raised $130 million from Sequoia Capital and Francisco Partners.  The proceeds will help them   with  expansion and provide cash to founders and early employees. 

“They’ve done a wonderful job of putting together a value proposition and creating a solution that’s often a 10th the cost” of traditional products, said Jim Goetz, a partner at Sequoia and a Barracuda director.  Initial Public Offering (IPO) in the offing?  Barracuda has a base of 150,000 customers.  They won SearchSecurity's Readers' Choice Bronze Award for Best of Web Application Firewalls 2012 in mid October (this is different from their NGFW solutions).  Barracuda topped both Fortinet and Juniper on the   NSS 2012 "Next Generation Firewall Security Value Map". This was released during RSA San Francisco.

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In early October, Check Point issued a press release stating that IDC Data in the latest IDC Worldwide Q2 2012 Security Appliance Tracker, that they lead the global market with 20.9% Firewall and UTM appliance revenue share.  They also stated that they are the leader in Firewall and UTM factory revenue in US with  a 22.1% share and Western Europe with a  29.8% share.

Fortinet rolled out their Fortinet second generation FortiASIC-SoC2 this week.  Groundbreaking performance!  Double the processing capacity!  They also rolled out their new Fortinet FortiOS 5.0 operating system.  Enabling more security!  Additional intelligence to fight advanced threats and secure BYOD (Bring your own Device) environments!  On the    "Next Generation Firewall Security Value Map",   Fortinet had  great Block Rate but a high Price per Protected Mbps.   

The rumor mill has Juniper Networks reportedly considering putting itself   up for sale.  Early names floating around as acquirers, EMC (this one is being panned), Brocade, and Arista.  Nonetheless, the stocked jumped 11% because of the rumors. 

http://www.networkworld.com/news/2012/101812-juniper-sale-update-263504.html?t51hb&hpg1=mp

A Juniper Networks patent suit is slowly working its way through the system, with a trial date set for February 2013.  There are a handful of patents being contested.  Palo Alto Networks founders Nir Zuk and Yuming Mao left Juniper to start Palo Alto Networks.  Juniper Networks was outperformed by everyone on the "Value Map".

Channelnomics has a nice summary about Juniper Networks, Palo Alto Networks suit  at http://channelnomics.com/2012/10/19/patent-list-grows-slow-juniper-palo-alto-suit/

 

Palo Alto Networks has been as high as $73 this year since closing at around $51 when they went public. They closed at $62 on October 19.

Look for lots of spin to take place with the  NSS  Comparative Analysis report over the next couple of months.  It's a comprehensive document. 

Becoming Learned on  the NGFW

Sourcefire is making NSS’s evaluation of their product available at https://info.sourcefire.com/2012NSSLabsNGFW.html

It’s several months old, but an additional nice source of information is the  NSS “2012 Next Generation Firewall Security Value Map”, released by NSS Labs during RSA San Francisco.  http://o-www.sonicwall.com/us/en/14233.html , which graphs Block Rate versus Price per Protected Mbps.

Want to learn more about evaluating NGFWs?  NSS has a relatively neutral document “What do You Need to Know about Next Generation Firewalls” at https://www.nsslabs.com/can-next-generation-firewalls-stand-heat

Learn about “Next Generation Firewalls for Dummies” and get a subtle push for the Palo Alto Network NGFW solution at http://connect.paloaltonetworks.com/ngfw-4dummies-EN

A Fortinet 2011 take on “Next-Generation Security for Enterprise Networks” is available at http://www.fortinet.com/next_generation_security_for_enteprise_networks.html

July 18 - Palo Alto Networks To Go Public Friday

July 18 addendum -  Palo Alto now expects to charge $38 to $40 a share in its public debut, up from the previously stated range of $34 to $37, according to an updated regulatory filing uploaded Tuesday evening. They expect  to establish a final price for the shares Thursday night and debut in public trading Friday.  A positive way to look at this.  The offering may be way oversubscribed. A negative way. Isn't this what Facebook did? Didn't the Facebook investors  get burned?  Proceeds may be up to $250 million.  A link to the most current S-1 is below.

July 14 addendum -  Venture capital firms Greylock Partners and Sequoia Capital will each hold 20.7% of the company after the IPO (Initial Public Offering), and Globespan Capital Partners will hold 7.4%.  They'll be listing as PANW.  The offering is scheduled to price on July 19, according to Bloomberg.

  They may try to raise as much as $229 million.  The initial anticipated price range, $34 to $37. This may help start up IPO activity again.   The IPO will take place on the NYSE. At the top of this pricing, they will  have a market capitalization of $2.5 billion. 

Firms leading the Palo Alto Networks IPO offering – primary lead is Morgan Stanley.  Others include Goldman Sachs, Citigroup Global Markets, Credit Suisse Securities, Barclays Capital, UBS Securities, and Raymond James. Palo Alto Networks filed their S-1 in April, reporting a loss of $12.5 million for the fiscal year ended July 31.  This is compared with a $21.1 million loss a year earlier.  Revenue had more than doubled to $118.6 million.  In a June filing, Palo Alto Networks  reported that third quarter sales for the three months ended in April rebounded to $65.7 million, for a 16% increase.  

To view the S-1, go to the link below.  The S-1 is about 160 pages of light reading. The S-1 is the amended July 17 version.
 
http://www.sec.gov/Archives/edgar/data/1327567/000119312512304885/d318373ds1a.htm

When Palo Alto Networks filed on April 6,  the  valuation of the IPO was for $175 million.  Unlike the Facebook IPO that had Zuckerberg owning roughly a gazillion shares and a major portion of the company, Palo Alto Networks founder   and Chief Technology Officer Nir Zuk owns 6.2% of  the Palo Alto Network shares. 

Palo Alto Networks and Check Point Software Technologies are the only two companies in the Leader portion 2011 Gartner Magic Quadrant for Enterprise Firewalls.

The patent infringement lawsuit file by Juniper against Palo Alto Networks late last year is still going on.

After the Facebook implosion, look for this to be  a reasonably priced IPO, with a reasonable pop.  Don’t put your money on an NYSE meltdown like the one Nasdaq had with Facebook.  Perhaps it was all the stress over Zuckerberg’s wedding that occurred shortly after the IPO.

Meanwhile, on the chest thumping front,    “Is Check Point's firewall really faster and cheaper?  Can they really see all apps on all ports?  Or even identify unknown traffic?”  Go to http://www.paloaltonetworks.com/cam/techbusters/  to view Palo Alto Networks’ video take on the situation. 

Palo Alto Networks Files Registration Statement for IPO

 July 6 - Go to  http://kensek.blogspot.com/2012/07/palo-alto-networks-ipo-roadshow-to.html  for an update

Next Generation Firewall (NGFW) vendor Palo Alto Networks filed for an IPO (Initial Public Offering) April 6. The valuation of the Initial Public Offering, - $175 million. No date for the IPO has been given. With a fair amount of certainty, you can predict that it won’t coincide with the Facebook IPO.

http://www.marketwatch.com/story/palo-ato-networks-files-plans-for-ipo-2012-04-07
 

To view the complete S-1 for the Initial Public Offering, go to the link below. As usual, Risk Factors abound. Palo Alto Networks (The Network Security Company™) has about 25 pages of Risk Factors including the lawsuit with Juniper Networks regarding patent infringement. This NGLS (Next Generation Lawsuit) hasn’t been settled yet. According to Palo Alto Networks in the S-1, “We intend to defend the lawsuit vigorously.” The S-1 is about 150 pages of light reading.

http://www.sec.gov/Archives/edgar/data/1327567/000119312512153764/d318373ds1.htm

Palo Alto Networks announced total 2011 revenue of $119 million. For the first six months of fiscal 2012, $114 million! Pretty impressive. They lost $12 million in 2011 and for the six months of fiscal 2012 are showing net income of $7.1 million.

The company hasn’t specified how many shares will be put up for sale in the IPO, nor at what price. It also didn't say what ticker symbol it will trade under. PAN doesn’t seem to be taken yet.

Palo Alto Networks doesn’t have to worry about NGFW vendor SonicWall taking the winds out of their IPO. Thoma Bravo sold SonicWall to Dell in March for about $1.2 billion. They had taken SonicWall private for about $750 million a couple of years ago.

Morgan Stanley & Co. LLC, Goldman, Sachs & Co., and Citigroup Global Markets, Inc. will act as lead joint book-running managers for the offering, and Credit Suisse, Barclays, UBS Securities LLC, and Raymond James & Associates, Inc. will act as book-running managers for the offering.

Palo Alto Networks and Check Point Software Technologies are the only two companies in the Leader portion 2011 Gartner Magic Quadrant for Enterprise Firewalls. They rate highest with Vision and Check Point highest with Ability to Execute. Their lawsuit friend Juniper is in the Challenger quadrant with a handful of others. Hewlett Packard is in a not enviable portion of the Niche Players quadrant. Another challenge for Meg Whitman and the Hewlett Packard management team for 2012.

Palo Alto Networks was also the highest rated vendor in the NSS Labs 2012 Next Generation Firewall Security Value Map, released during RSA San Francisco.

http://kensek.blogspot.com/2012/03/sonicwall-palo-alto-networks-top.html

Fast growth. Profitable. Gartner likes them. Multiples models including three series of firewalls with different platforms within those depending on throughput, VPN's, sessions desired, etc. Favorable test results from NSS Labs though Palo Alto Networks isn't the only NGFW vendor. You can't call everyone else's NGFW (Fortinet, SonicWall, among others) a kludged together UTM (Unified Threat Management) appliance. Let the pricing of the stock and subsequent valuation (don’t forget to allow for that required first day pop (money left on the table, ouch!)), begin!

http://kensek.blogspot.com/2012/03/palo-alto-networks-ipo-preparations.html

Juniper Networks Slaps Patent Suite on Palo Alto Networks - December 19

Juniper Networks is suing Palo Alto Networks cofounders Nir Zuk and Yuming Mao for patent infringement. PAN’s cofounders left Juniper in 2005 to start PAN. Zuk and Mao are accused of willful infringement of six patents Juniper Networks acquired when they purchased NetScreen in 2004. If you can’t win in the marketplace, see if there’s some way to gain a win in the courtroom. Whether this will delay an IPO (initial public offering)by Palo Alto Networks is hard to tell.

http://www.crn.com/news/networking/232300802/juniper-slaps-patent-suit-on-palo-alto.htm

To borrow heavily from William Congreve, "Hell hath no fury like a company scorned from the Gartner leaders quadrant or feeling violated about patent infringement."


Palo Alto Networks and Check Point Technologies are the only two companies in the Leaders quadrant in the December 14, 2011 Gartner Magic Quadrant for Enterprise Network Firewalls. Juniper Networks is one of four in the Challengers quadrant.


Hewlett-Packard is in a somewhat embarrassing portion of the Niche Players quadrant. Hewlett Packard CEO Meg Whitman may need to have a serious talk with the security group at Hewlett Packard about this. The lower left hand corner is not “coveted”.


There’s a misconception, perhaps foisted upon prospects by vendors, that the only companies to consider purchasing solutions from are in the Leaders quadrant of a Gartner Magic Quadrant. A good document from Gartner to read is “Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors within a Market”. It’s written by Gartner analyst Charles Smulders, ID: G00154752


A few sentences from the document - “To evaluate vendors in the Leaders quadrant only and ignore those in other quadrants is risky and thus discouraged.” Use a Magic Quadrant to narrow your list of choices, but don't base your decision only on the model. Talk to the Gartner analyst who created the research for more details."

http://channelnomics.com/2011/12/19/juniper-lodges-lawsuit-palo-alto/


Read the above sentences to any vendor who flashes a Garner Magic Quadrant from his slide deck during a presentation!