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Check Point strengthens perimeter with Zone Labs

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Check Point Technologies acquisition of Zone Labs for $205 million will provide it with the means to beef up its offerings in endpoint security and SSL VPNs, areas where its rivals have been making strides recently. It will also give Check Point a sizable consumer business for the first time, with the ZoneAlarm product helping to increase brand awareness.

Check Point Software Technologies will pay $113 million cash and $92 million worth of shares for Zone Labs in a deal that is expected to close in Q1 2004. Check Point CEO Gil Schwed has said that Zone will be operated as a separate division and will keep its brand.

Zone is perhaps best known for its free and paid-for versions of ZoneAlarm, personal firewall software, which it offers to consumers and businesses. But recently it has been heavily touting its Integrity enterprise endpoint security system.

Integrity allows companies to enforce security policies such as patch level and anti-virus signature status on desktops across their network. Through integration with network devices, desktops can be blocked or quarantined if they are not policy compliant.

Mr Schwed says that this complements SecureClient, Check Point's virtual private network software, which often includes a network firewall component. The firewall component is the only major area of overlap.

The deal will aid Check Point in its strategy of expanding beyond its historical strength in perimeter security, where it dominated the stateful inspection firewall market but has recently seen its growth stall as rivals grow.

Zone has been partnering heavily with providers of SSL VPNs, including some companies that Check Point competes with, including NetScreen Technologies (due to its acquisition of Neoteris) and Aventail. SSL VPNs allow remote users to access corporate resources using SSL as the secure transport protocol, negating the need for IPSec client software. Integration with endpoint security software gives companies more confidence the access point is also secure.

Check Point hopes its new Zone division will experience 50% revenue growth in 2004, to $42 million from the $28 million it is expected to record in 2003. The deal will also mean that Check Point will have a sizeable consumer business for the first time. Check Point intends to keep offering the free ZoneAlarm product, as it creates brand awareness and acts as a good testing ground for new technologies.

Source: Computerwire/Datamonitor

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