Check Point Sees Better Product through Nokia Acquisition

Check Point Software Technologies’ acquisition of Nokia’s security
appliance unit will expand the security company’s expertise and value
of its product line, creating greater value for partners and customers,
says the company’s channel chief Amnon Bar-Lev.

In an interview with Channel Insider, Bar-Lev foresees few problems
with the integration of the Nokia hardware platform with the Check
Point software offerings, considering the two companies have been tight
partners for the better part of a decade. Rather, Bar-Lev sees a
reduction in the number of SKUs partners and customers must track and a
greater ease-of-use coming from the two product lines being collapsed
into one.

“The issue we’ll mostly have is with timing for the logistical and
market support,” said Bar-Lev. “The issue isn’t a move of a software
company becoming a hardware company; it’s more of extending our
capabilities and expertise.”

Nokia, the financially challenged telecommunications and cell phone
handset manufacturer, announced in September that it would sell its
security appliance unit to an undisclosed private investment group.
Subsequently, rumors circulated that other companies were interested in
the purchase, but no concrete public offers emerged.

Check Point’s acquisition announcement Monday
came as a bit of a surprise, but not a complete shock. Check Point,
primarily a security software company, has partnered with Nokia in
selling bundled FireWall-1 and VPN-1 software on its Ipso security
appliances for years. Had another vendor purchased the Nokia unit, it
could have spelled serious trouble for Check Point.

“As a pioneer in security appliances, the Nokia security appliance
business has been an important strategic partner for Check Point and
has helped us achieve early leadership in the security appliance
market,” said Check Point CEO Gil Shwed in a statement. “Adding Nokia’s
security appliance portfolio into Check Point’s broad range of security
solutions is the natural conclusion of our long collaboration, and will
assure a smooth path forward for our mutual customers.”

For the most part, solution providers and partners of both companies
are praising the merger. They believe a tighter integration of Check
Point’s software on the Nokia platform will create better, stronger and
more competitive offerings.

“There are a lot of customers who had benefited from both
technologies together,” said Paul Kunze, director of sales at
IntraSystems in Dedham, Mass., which partners with both Check Point and
Nokia. “The hardware market made it a competitive environment for them
and [the different licensing models created] a lot of confusion for the
customer, so depending on what they actually do, I think that confusion
will be reduced.”

“The centralized management of Nokia’s Ipso OS has always been very
strong, which is why a lot of end users selected that product set as
their appliance despite the confusion and the extra expense,” added
Gregory Flatt, president of Nashville-based Flat Earth Networking. “The
fact that confusion is no longer there is going to be very important.”

The one reservation expressed by solution providers is whether Check
Point can succeed in the security hardware business where others have
failed. Most notable, Symantec was among the first security vendors to
launch appliance-based unified threat management solutions with its
Security Gateway product and had a strong hardware-based VelociRaptor,
which it acquired from Axcent. However, both of those products have
been discontinued because of poor market performance, leaving Symantec
to focus on its core security software offerings.

“My concern is we saw how poorly being in the appliance space worked
out for Symantec. I just hope Check Point can have more success with
it,” said Evan Leonard, president and co-founder of Chips Computer
Consulting in Syosset, N.Y. “Symantec still hasn’t recovered in my
mind, and if Check Point struggles I think it would be even worse.”

While Check Point has enjoyed strong partnerships with hardware
vendors, it has struggled to compete against traditional hardware
security vendors, such as Cisco Systems and Juniper Networks. Even
after launching its first business-class appliance, UTM-1, it played
catch to UTM vanguards Fortinet and SonicWall.

Bar-Lev envisions a new product line where Check Point’s security
software is tightly integrated on the Ipso platform, creating offerings
that compete directly with Cisco and Juniper. He believes the demand is
there for Check Point hardware offerings; in the last quarter, 44
percent of Check Point’s product bookings came from its existing
appliances.

The Nokia acquisition will give Check Point significant hardware
capacities, but Bar-Lev doesn’t see it changing the nature of Check
Point’s operating philosophy. “Check Point grew up a software company.
We’re unique because we’re the only vendor to offer two options for
buying products, either as software or on hardware.”

The acquisition is expected to close late in the first quarter of
2009. Bar-Lev says Check Point will continue to support non-Check Point
Nokia customers. He says 99 percent of Nokia’s customers are also Check
Point customers. 

Channel Insider correspondent Charlene O’Hanlon contributed to this report.