Nokia führender Anbieter bei Security-Anwendungen

Nokia's Security Connection

The Finnish cell-phone giant is threatening to overtake even Cisco in
the hot area of firewall appliances.
By Alex Salkever, Business Week
August 29, 2001 2:03 PM PT

It's not just about cell phones anymore. At least, that's the message coming
from wireless giant Nokia (NOK ). Over the past three years, Nokia Internet
Communications, a U.S.-based division of the Finnish company, has grown
from a pipsqueak in security to a force to be reckoned with. According to tech
researcher IDC, Nokia is quickly grabbing market share in the exploding
market for firewall/VPN appliances.

These appliances are dedicated computers used to run firewall systems and
to establish and maintain virtual private network (VPN) connections, encrypted
"tunnels" of data that allow employees to log on to corporate networks from
remote locations without compromising security. In a June, 2001, report, IDC
analysts claimed that companies spent $943 million on these appliances last
year. That's significantly up from $182 million in 1998 and $373.5 million in
1999.

According to IDC, Nokia grabbed 22% of that share in 2000 -- a 430%
increase over its market share in 1999. Those numbers seem to be
corroborated by vendors and customers, who generally give Nokia's products
rave reviews. "There is not a Nokia box that I have seen that doesn't give
outstanding performance," says Brenda Wilkins, vice-president for sales at
Canadian Web-security product vendor WhiteHat. According to Wilkins, 60%
to 65% of her customers prefer Nokia over other firewall appliances.

Growing Fast
Dan MacDonald, Nokia's vice-president in charge of Internet security products,
says revenues from security have gone from the tens of millions of dollars in
1999 to hundreds of millions last year. (The company won't disclose exact
numbers, but 2000 revenues appear to be in the range of $100 million to $200
million, based on units sold.)

Last year, Nokia sold over 50,000 machines, costing from several thousand
dollars to $60,000. Security sales remain tiny for a company that booked
$26.9 billion in 2000 gross sales. But the segment is growing much faster than
Nokia's 35% aggregate growth rate for the past year.

Nokia first got into security in 1998 with the idea that it would eventually need
to know how to secure wireless networks the world over. That security
background would help customer adoption rates and allow Nokia to offer more
complete services to buyers of its wireless-network gear. Of course, it didn't
hurt that analysts had projected a boom in the Internet security market.

Unified Interface
What exactly does Nokia sell? Put simply, it designs computers equipped
with a specially designed, hard-to-hack version of the open-source BSD
operating system, a branch of the Unix family that also includes Linux. These
machines are specially optimized to run software from leading security
vendors, including firewalls from market leader Checkpoint (CHKP ),
intrusion-detection systems from Internet Security Systems (ISSX ), and
antivirus software from MacAfee. The only major pieces that Nokia itself
contributes are VPN-management software and a management console that
makes it easier for security engineers to monitor multiple products in a single,
unified interface.

This approach lets Nokia's customers pick and choose what type of security
programs, all with trusted brand names, they want to run. And they can do
this on a single dedicated system (or, more likely, two of these systems,
including a primary and a backup).

Nokia also includes load-balancing software, programs that speed up networks
by directing data traffic away from the busiest link. "If you buy a Nokia
appliance and you're able to install three products on it," says Wilkins, "you
have saved yourself the cost of buying three operating systems."

The Cisco Challenge
Other key advantages in buying an appliance, Nokia says, are
speed-of-installation and ease of use. Loading and fine-tuning finicky security
software is notoriously time-intensive. "When you take Checkpoint software on
a CD and load it on a standard Sun platform, it will take you five to seven
hours before you get to load in the actual firewall policy. We do all that for the
customer beforehand, so they can load it straight into the rack and be ready
much faster," says MacDonald.

That goes for everyone from small businesses to massive telecoms and data
farms. Nokia's top-of-the-line appliances can pump through a gigabit of data
per second, enough even for very large companies such as Qwest and Digex.
On the other end of the spectrum, Nokia bought appliance maker Ramp
Networks in January, 2001, for its lineup of small-business security products.

Sounds good to customers. But Nokia still faces plenty of obstacles before it
can dominate the security-appliance market. For one, the Finns compete with
Cisco Systems (CSCO ), which has a stellar sales force and an easy in with
clients already buying Cisco routers. While its Pix firewall appliance is as fast
as Nokia's, Cisco's products are generally more difficult to configure,
according to analysts.

Dependency Problem?
Aside from Cisco, Nokia could face competition from other firewall appliance
makers using the same Checkpoint system. The Israeli company has licensed
its firewall software to several other appliance makers, including Intrusion.com
(INTZ ) and Compaq Computer (CPQ ). "We have run into Intrusion.com a lot
more lately," says Wilkins.

Another company, NetScreen, has built a firewall appliance that is based on
hardware, not software. That promises faster operation and more security. Yet
another company, SonicWall (SNWL ), makes a gigabit-throughput firewall
that's cheaper than Nokia's and easier to use, according to some analysts.

Nokia's one glaring weakness might be its dependence on Checkpoint. The
top-rated firewall has proven a deal-sealer for Nokia. But although it sells
Checkpoint firewalls, Nokia competes with the company in the VPN arena,
where it uses its own software. And tensions are said to be developing. Last
spring, Checkpoint lost out in several key VPN contracts to Nokia.

Harmful Split?
"Nokia's relationship with Checkpoint is reported to be healthy by both parties,
yet the industry is constantly filled with rumors of a divorce," says Richard
Stiennon, director of network-security research for consultancy Gartner.
Stiennon thinks a split would be harmful to both companies. "A divorce would
devastate Checkpoint's sales as well," he says. He estimates that 40% of
Checkpoint's software licenses are sold for Nokia appliances.

With a sales force that rivals or betters that of Cisco, Nokia should have no
problem marketing its products. And the market for security appliances, which
IDC expects to grow to $4 billion by 2005, could prove big enough for several
players. One of those players -- and possibly the dominant one, if it can trump
Cisco -- will be Nokia.

   Copyright 2001, by The McGraw-Hill Companies Inc. All rights reserved.

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