Thursday, May 19, 2005

Checkpoint on the defensive

A 4 page detailed article on the woes of Checkpoint and the problems facing them.

The company on Monday plans to unveil a major upgrade across a number of product lines, moving to unify its perimeter, internal and Web security offerings with a common code base. The new NGX platform upgrades the core technology in its VPN, firewall and management software products.

But Check Point, a pioneer in firewalls and virtual private networks, faces vulnerabilities of its own. It has been slow to roll out new products, analysts say, and only recently has started to show signs of a willingness to change. The competitive landscape is looking harsher, too, with the looming presence of networking heavyweights such as Cisco Systems and Juniper Networks and software giants like Microsoft getting in on the action.Historically, Check Point has been slow to roll out new product lines, remaining largely dependent on its existing customers to renew their subscriptions every year, analysts say. They say the company's desire to maintain its high profit margins have impeded its willingness to take on risks, thereby affecting its ability to be first to market with new products, and that same desire keeps a lid on its spending for research and development.

At the same time, there's a cloud over a key source of revenue--licensing dollars--even as some customers are grumbling about increasing fees. "They're slowly falling behind the ball," said Gene Munster, an analyst with Piper Jaffray. "Check Point says that Cisco has been in their market for years and hasn't affected it, but all you have to do is look at their licensing revenue."
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