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

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

The Meg Whitman Era at Hewlett Packard - Six Months In

March 20 Addendum - Hewlett Packard Meg Whitman plans to combine the computing giant's PC and printing divisions in a major internal overhaul intended to spur combined sales of hardware to customers

The most recent move is intended to reap the synergies of two divisions whose hardware products are often sold side-by-side, said the second source familiar with the plan. (From Reuters)

Sounds like reductions in force ..... No economies of scale in manufacturing. No economies of scale in R&D. Do people need to upgrade their printer when they get the latest and greatest PC or laptop?

Still a B-

Original Post

Meg Whitman has now been CEO of Hewlett-Packard for six months. The scorecard? Probably a B-. It’s virtually impossible to make radical changes in 180 days unless your strategy is slash and burn. And that’s not what HP requires. HP is a $48 billion market cap firm with over 300k employees globally. This will take awhile. Whitman is saying two years.

Threats facing HP Whitman has pointed out include - PC sales are slowing as more people buy smartphones and tablets. The high-profit ink business is slipping as customers store photos on Facebook (or other sites) instead of printing them at home. HP is selling fewer high-end servers after archrival Oracle (ORCL) stopped making software for those systems.

Some immediate decisions needed to be made, quickly, when Whitman accepted the CEO position. She already was on the board. From a perception perspective, Whitman moved top executives out of their offices and into cubicles instead. This rings of the “old HP”, which is a good thing. This wasn’t seen during the Carly Fiorina era!

HP is keeping its $40 billion PC division. However, growth is projected to be in tablets. In this area, Apple has the lead over all other competitors. Tablet sales, driven by sales of Apple’s iPad, grew 274.2% to 63.2 million units last year — most of them iPads, according to tech tracker Canalys. Sales of desktop computers grew 2.3% to 112.4 million units; notebook sales grew 7.5% to 209.6 million units; and netbook sales fell 25.3% to 29.4 million units.

“PCs remain key tools for everything from video editing, music mixing, and spreadsheet crunching to thoughtful missives,” according to James Mouto, general manager for of HP’s personal computer business unit. “And if you’re sending Junior off to college, the first computing product needed for homework is a PC.”

http://www.forbes.com/sites/briancaulfield/2012/03/07/hp-responds-to-apple-your-college-kid-still-needs-a-pc/

WebOS is going open source in September, when Open WebOS 1.0 is scheduled to be released. 500 WebOS employees were let go last September. 275 of the remaining 600 employees were released in late February.

For the stock quants - the stock price is up a little over 7.4% at $24.49 (March 16) since Whitman took the CEO helm. This is far below the 52 week high of $43.28 in March 2011. Competitor Dell is up 24% and the Dow is up 23% over the same period.

HP also has heavily invested in security. This includes acquiring security management company ArcSight for $1.2 billion in 2010. This is also an area Dell has chosen to invest in. Last week they announced that they were purchasing SonicWALL®, Inc. a provider of intelligent network security and data protection solutions. They are acquiring SonicWall from private equity investor firm Thoma Bravo for an estimated price of $1.2 billion.

http://kensek.blogspot.com/2012/03/dell-to-acquire-sonicwall.html

It should be an interesting next 6 months for Whitman as she works with the rest of management to turn HP around. Her salary? $1. Yes, there are incentives and stock options.

http://www.mercurynews.com/business/ci_20201896/whitman-steadies-hp-but-big-challenges-remain

Dell to Acquire SonicWALL

Dell announced today their intention to acquire SonicWALL from equity investor firm Thoma Bravo. Thoma Bravo had take SonicWALL private in 2010. They have also recently had purchased secure web gateway company Blue Coat Systems and taken it private. This acquisition, according to Dell, will enable them to offer customers a broader range of enterprise offerings. SonicWALL revenues for the last 12 months were about $260 million. www.sonicwall.com

“Dell’s distribution, reach, and brand are well-recognized across the industry. This transaction aligns well with Dell’s mid-market design focus and allows us to accelerate growth of our flagship SuperMassive Next-Generation Firewall solutions with Large Enterprise customers,” said Matt Medeiros, president and CEO, SonicWALL. “Additionally, SonicWALL is recognized as a leading security solutions provider for small and medium businesses through our UTM solutions. Dell’s phenomenal breadth and reach into small and midsize companies provides a significant opportunity to expand our customer base.”

Before being taken private by Thoma Bravo, SonicWall’s strengths were in serving the SMB marketplace with advanced network security and data protection solutions. They have expanded their portfolio to include Next-Generation Firewalls (NGFW), providing these in a form factors scalable to the enterprise.

SonicWALL and Palo Alto Networks were the top performers in a recent NSS Labs analysis, the “2012 Next Generation Firewall Security Value Map™” (NGFW). The value map illustrates Block Rate versus Price per Protected Mbps. The SonicWall SuperMassive E10800 and the Palo Alto Networks PA-5020 NGFWs were the “winners”.

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

Effect on Product Development for SonicWALL - To the extent Dell leaves the development team intact to do their own thing, disruptions should be minimal.

Effect on the SonicWALL brand - No one has said whether the company name SonicWALL will be going away, yet. . Nothing has been said as to whether Dell will use the McAfee/Intel model of having the company be a wholly owned subsidiary of Dell.

Other products SonicWALL brings to Dell - Besides firewalls, NGFWs, and Unified Threat Management (UTM) solutions, secure remote access, email security, backup and recovery, and policy, and management and reporting. Dell is acquiring a nice set of security solutions.

Effect on the SonicWALL channels - SonicWALL has 15,000 resellers providing global coverage. Dell plans to “take the very best of the SonicWALL channel programs” (sounds like a reduction…..) and combine it with Dell’s PartnerDirect program. Dell’s existing PartnerDirect members will be able to sell SonicWALL solutions.

SonicWALL was a public company until 2010, when Thoma Bravo acquired it for $717 million. Investors and analysts are estimating the purchase price to be between $1 billion and $1.5 billion. Healthy return by Thoma Bravo for a 2-year investment! Dell will be funding the deal with cash.

It would be interesting to hear what they’re saying about this at Palo Alto Networks, Check Point Software Technology, Barracuda Networks, and Juniper Networks. IMHO, the Palo Alto Networks IPO (Initial Public Offering) valuation may drop by a bit.

http://content.dell.com/us/en/corp/d/secure/2012-03-13-dell-sonicwall-acquisition.aspx