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.

“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.