Jerry Ungerman, president of Check Point Software Technologies Ltd. in Redwood City, Calif., earlier this month spoke with Computerworld US about how the firewall/virtual private network (VPN) market leader is faring in the current economic environment, and where the company is headed amid expectations of a recovery. Excerpts follow.
What is Check Point’s relationship with WorldCom? WorldCom is a very big partner of Check Point. They used to carry multiple security products, but sometime last year, they decided they were going to standardize on one security product. Right now, we are the [sole] security product that WorldCom packages and resells, on a stand-alone basis as well as a managed service offering, on a worldwide basis.
Are you concerned about WorldCom’s financial problems? Obviously, their core business has been impacted with the telecom slowdown, and they’re dealing with some other issues. But right now, we have a very good relationship. They’re a very good partner, and they’ve been doing very well for us.
How has the meltdown in the telecommunications sector affected you? It’s not had a big impact on us. The biggest impact has been the overall economic slowdown — the IT spending slowdown, as opposed to telecom specifically.
Your first-quarter results were down across the board from the same period a year ago. I know you’re in a quiet period until your second-quarter financial results are released on July 22, but what can you say about your financial outlook in general? One of the things that we still see is that security is one of the more important areas that IT executives are focused on. We still think we’re getting a larger percent of the spending — and the increase in spending, to the extent that there is any — than other kinds of technology products.
This year, we haven’t seen as much of an economic recovery as we expected, although most of our projections were for recovery in the second half of the year, with most of it coming in the fourth quarter. We’re not there yet, so we don’t know if it’s going to happen. But we do know that people are not being allowed to buy as much as they need right now. They’re being very cautious in their spending, delaying, to some extent, some of the full implementations of projects. But we still think security is at the top of the list, from a focus and spending standpoint.
When you announced that you were going to end maintenance support for Version 4.1 of your firewall/VPN product at the end of this year, some of your customers were pretty upset. Where does that stand? The fact is, we’ve extended the date for support of 4.1 because of that input, and we work with customers to have them upgrade. We extended it to June 30, 2003.
The fact is, they get to upgrade for free. We’re not forcing them into it or charging them for it, as long as they’re on subscription, which the vast majority of the base is.
Do you have any new-product development plans for the immediate future? We see the need for firewalls and VPNs continuing to grow, even in the enterprise space. Most of the VPNs have gone into intranet deployment, tying in remote employees and offices. We see there’s a big opportunity coming, and we’re going to bring out a management capability to really make extranets a reality, where companies start tying in partners, customers and suppliers into their networks.
When are we going to see this? Before the end of the year. We’ve already brought to market the beginnings of it, the foundation for the capability.