Though security giant Check Point Software Technologies (Nasdaq:CHKP) is not too keen on answering its smaller American competition NetScreen, it finds it hard to ignore the harsh words aimed at it by NetScreen president, CEO, and director Robert D. Thomas, in an interview with Israeli financial daily Globes.
Though Check Point regards NetScreen as a very small competitor, it is still one loud company, something Check Point has never had to be. "If a company waltzes in yelling 'Check me out!' and 'Watch me do everything better than Check Point, Nokia (NYSE:NOK) and all the other big timers!', best of luck to them," said Check Point senior VP and founder Marius Nacht in a press conference today celebrating the launch of a new small office product line.
With a company value of $8.5 billion, compared with NetScreen's $1.5 billion market cap, Check Point regards Cisco Systems (Nasdaq:CSCO) as its only competitor worth the title. Check Point in fact hardly gives NetScreen the time of day. "Any company can take a 3% bite out of any market. If its gets to 13% than it deserves our appreciation, but getting to 20% from there is almost impossible in today's security market. The only companies standing to make any profit are those with a 30% and more market share. They can invest in hundreds or thousands of development personnel."
According to its recent survey, Check Point claims to have 62% of the VPN market and 41% of the firewall market in the year 2000.
One of Check Point's downfalls named by Thomas in the interview was that the company is inattentive to its customers needs. "We have 2,000 partners around the world, some have been there for eight years now, and I believe they are better gauges of customers than Thomas," says Nacht. "He has given us perfectly good advice we have heard before, and if he is saying lower the price of your products, then thanks, we heard it before."
Thomas claimed in the interview that Nokia, Check Point's hardware partner, developed an independent solution for VPN, after having been displeased with the Israeli company's product. Two months ago however it announced it would cease independent production and go back to those made by the Israeli company.
Thomas went as far as to claim the combined Check Point Nokia product, based on NG, or next generation technology, did not work well and was not distributed in worldwide markets. "Mr. Thomas can say whatever he wants. We have been associates of Nokia for more than four years, and we recently renewed our 'marriage vows' with them. Our relationship is incredible, and we plan to strengthen it in the future," says Nacht.
"We worked on our NG product for almost three years and it is now available to customers using Nokia hardware appliances, though in April it was still unavailable. We have great respect for our partnership with Nokia, and we must take their considerations into account," says Nacht, implying it was Nokia that put the NG solution on hold, while in the meantime using Check Point's software version from 2000.
NetScreen takes pride in its ability to provide integrated hardware and software solutions without the help of external hardware companies. "There's no hardware without software, and there's no software without hardware, and trying to tell the world there is a hardware only solution somewhere is utter bullshit. NetScreen also occasionally announces new versions of its operating systems," Nacht concluded