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IBM Cements Security Standing With Redoubled Check Point Alliance

Tech giant IBM ( IBM ) is solidifying its cybersecurity standing by deepening ties to No. 1 pure player Check Point Software Technology ( CHKP ) to pool research and integrate systems, the companies were scheduled to announce Thursday. It’s the most recent in a series of IBM moves to publicly step-up its cybersecurity initiatives. In 2015, IBM drew in $2 billion in cybersecurity sales , just 2.4% of total revenue. But that dollar mark easily topped total sales for Palo Alto Networks ( PANW ), Proofpoint ( PFPT ), Fortinet ( FTNT ) and FireEye ( FEYE ), and 12% year-over-year growth outstripped that of Symantec ( SYMC ) and Check Point. By combining forces, IBM and Check Point aim to thwart what the United Nations estimates is the $445 billion cybercrime underworld. Check Point’s and IBM Security’s researchers will be free to cross company borders to discuss threat data. And several Check Point applications will be folded into IBM technology, Check Point’s vice president of security services, Avi Rembaum, told IBD. The alliance redoubles an 18-year relationship between IBM and Check Point. IBM manages security offerings for clients across the globe, and those implementations sometimes include Check Point products. The two companies have partnered in that regard for the past 18 years. Thus, IBM is keenly apprised of Check Point’s software. Under the new accord, Check Point will further school IBM on its tech. “Tightening the relationship means we’ll be giving IBM very deep guidance around exactly what fields they should be looking for and how systems integrate,” Rembaum said. The new alliance centers on four main keys. Check Point and IBM will combine research forces to create “a gigantic pool of security researchers,” Rembaum said. Doing so will expand the potential threat intelligence-gathering net, but also lend credibility to potential discoveries. “When we conduct research, it’s nice to have another leading organization with which we can provide notes,” he said. “It’s helpful to have a pool of researchers to validate assumptions. . . . When two sources say it’s true, it makes it more relevant and more critical.” But what’s more compelling is the integrated threat-prevention and analytics technologies, Rembaum says. Check Point will fold its SmartConsole application into the IBM Security App Exchange for integration with IBM’s Security QRadar Intelligence Platform. Together, the systems can tackle the entire security gamut — analyzing, blocking and mitigating attacks. The integration also means that a customer can operate within an IBM space but still access Check Point functions, Rembaum said. IBM customers will also be allowed to manage Check Point Mobile Threat Prevention within IBM’s MaaS360 enterprise-mobility management system, a software used to remove malicious apps and do quick security rollouts. Mobile is “the most critical space” for customers to protect, he said. “(Smartphones) are an always-on and always-connected vehicle for employees,” he said. “And they operate outside the corporate security perimeter.” The expanded alliance also allows IBM to manage Check Point’s entire suite of products for clients, Rembaum said. Check Point will expand the number of tools IBM supports. “So IBM can be there in lockstep with us when we offer services,” he said.

Cisco Lobs Firewall Barbs To Whack Palo Alto, Check Point, Fortinet

Networking firm Cisco Systems ( CSCO ) was slated to mount a cybersecurity charge Tuesday, unveiling a next-generation firewall to squash Palo Alto Networks ( PANW ), Check Point Software Technology ( CHKP ), Fortinet ( FTNT ) and Intel ( INTC )-owned McAfee. Protecting digital data is a $19 billion opportunity over the next 10 years, Dave Stuart, Cisco’s director of product marketing, told IBD. Cisco’s Firepower Next-Generation Firewall will capture some of those billions, he says. “We believe this level of integration is unprecedented in the environment,” Stuart says. “Competitors . . . miss that opportunity to correlate information to shrink that time-to-detection rapidly in the market.” Tech Giants Battle Pure Players In Security Stuart’s words are merely the latest barb lobbed against pure players in the cybersecurity battle for market share . Broad-based tech giants IBM ( IBM ), Cisco, Dell and Microsoft ( MSFT ) have made hefty investments in recent years to carve out security sales, going up against each other and companies that focus solely on security wares. On Wednesday, Cisco posted fiscal Q2 results, saying its security sales for the quarter ended Jan. 23 rose 11% from the year-earlier quarter, to $462 million. Cisco’s overall revenue was flat. For the first half of fiscal 2016, Cisco’s $947 million in security sales rose 9%, to $947 million. Cisco’s half-year security revenue already eclipses the total 2015 sales for CyberArk Software ( CYBR ), Proofpoint ( PFPT ), FireEye ( FEYE ) and Palo Alto Networks, and is nearing Fortinet, which reported $1.01 billion in 2015 sales. And security made up just 4% of Cisco’s $11.8 billion in total fiscal Q2 revenue. “We clearly have our efforts behind security,” Stuart said. “The opportunity is not lost on our adversaries either.” Industrywide, a breach is generally detected within 100 days, Stuart says. He says Cisco’s technology shrank that to 17.5 hours, down from 46 hours in the prior quarter. Firepower pulls intelligence from across that technology to detect a breach. Firepower Deletes ‘Human’ Element As Stuart describes it, upon a breach, the Firepower management center forces the “stranger-host” into a contained environment. The process is automated — it doesn’t require “back-end analysis with humans,” Stuart said. “We are providing the best of breed on the IPS (intrusion prevention system) side, advanced breach detection on the malware side and leading third-party platforms,” he said. “All that goes into a platform that is best of breed and doesn’t force that choice between products.” Last year, Cisco acquired security vendor OpenDNS for $635 million, adding to its $2.7 billion Sourcefire acquisition in 2013. Via OpenDNS, Firepower can detect malicious online activity and then “instruct the URL to batten down,” Stuart said. “That’s the integration we’ve built into the platform now,” he said. “It really does differentiate us.” Firepower’s code is a singular code. Adding third-party layers will require joint efforts among security teams to ensure that the new code is up to snuff, Stuart said, adding, “We’re not opening this up for anybody to write their code onto it.” Segmentation Advisory Launched In conjunction with the Firepower announcement, Cisco was set to unveil its Security Segmentation Service, an advisory service designed to examine a client’s data for weaknesses, and then create a customized security approach. But that doesn’t mean Cisco is necessarily peddling its segmentation solution, TrustSec, Stuart says. Cisco competes in the segmentation market against pure players like Fortinet and Symantec ( SYMC ). The advisory service is merely a design jumping point, Stuart said. “We start with a workshop,” he said. “After about 60 days we discern what their business and compliance issues are. That goes essentially into building a design for segmentation.” Stuart acknowledges that Cisco is a newer entrant to the cybersecurity market. Switching, routing and collaboration remain its largest chunks of revenue, bringing $3.48 billion, $1.85 billion and $1.02 billion, respectively, in total fiscal Q2 sales. Cisco long has been the No. 1 maker of networking gear. Rivals “have been in the next-generation firewall space for a while,” he said. “I might add, some of the vendors providing sand-boxing are trying to expand their portfolios into prevention and remediation. We’re way ahead on them in terms of those aspects.”

Symantec Will Be ‘Very Judicious’ With $5 Bil M&A War Chest: CEO

Symantec ( SYMC ) will have a $5 billion M&A war chest by 2018 — but it’s not burning a hole in CEO Mike Brown’s pocket. Brown told investors Thursday that the cybersecurity firm will be “very judicious” in finding the right acquisitions. Cybersecurity stocks were walloped early Friday, and IBD’s 26-company Computer Security-Software industry group plunged 7% after LinkedIn ( LNKD ) and Tableau Software ( DATA ) stocks crashed 40% and 47%, respectively, when both companies gave weak guidance late Thursday. But Symantec stock bucked the trend, giving in-line guidance late Thursday and posting fiscal Q3 earnings that topped Wall Street estimates. In midday trading on the stock market today , Symantec shares were up more than 4%, near 20, after rising as much as nearly 10% early. The company late Thursday also announced a $500 million investment from private equity firm Silver Lake Partners , bumping its capital return program to $5.5 billion — a development that Wall Street analysts called opportune as Symantec’s M&A appetite grows. Ken Hao, a Silver Lake managing partner, joined Symantec’s board. Symantec is undergoing a necessary transition as it attempts to become “leaner and more focused,” FBR analyst Daniel Ives wrote in a research report. Ives reiterated his market perform rating on Symantec stock. Symantec on Jan. 29 completed its sale of data storage unit Veritas to the Carlyle Group for a purchase price of $7.4 billion. Late Thursday, Brown also announced a restructuring effort that aims to cut $400 million from expenses over two years. “We believe the confluence of M&A, aggressive buybacks and a tighter operating model finally puts this company on the right path after a decade of pain,” Ives wrote. “This remains a work-in-progress name, but we are now starting to be more optimistic that better days could be ahead for a ‘leaner and more focused’ Symantec.” And it doesn’t hurt “to have (Silver Lake) in Symantec’s corner,” he added. Customer, Enterprise Sales Decline Fiscal Q3 sales of $909 million and 26 cents earnings per share ex items beat the consensus of 29 analysts polled by Thomson Reuters for $905.8 million and 24 cents. Customer revenue of $414 million and enterprise revenue of $495 million fell 10.2% and 2.8% year over year, respectively, Credit Suisse analyst Philip Winslow wrote in a report. But those measures topped his estimates for $411 million and $492 million, Winslow noted. Current-quarter guidance for $885 million to $915 million in sales and 24-27 cents EPS ex items were in line with Wall Street views for $901.7 million and 25 cents. Eventual acceleration within the customer segment is likely, Winslow wrote. But “the outlook for accelerating enterprise security growth is more uncertain given intense competition across the enterprise security landscape and the endpoint in particular.” Winslow maintained his neutral rating and 25 price target on Symantec stock. Symantec is positioning itself with 12 new product releases in 2016 to build “a strong reputation in the next-generation security market,” William Blair analyst Jonathan Ho wrote. Competitors within that segment include Palo Alto Networks ( PANW ), CyberArk Software ( CYBR ) and Check Point Software Technologies ( CHKP ). Ho reiterated his market perform rating on Symantec stock. Midday Friday, shares of Palo Alto Networks, CyberArk and Check Point were down 12%, 8% and 2%, respectively.