NETWORK SECURITY PRODUCTS: Vanilla Sold, Mostly

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As network uptime began to be equated with business uptime, network security emerged as a prime concern for Indian businesses in FY 2002–03. Vendors offering network security hardware and software solutions identified India as a key emerging market. Almost every big network integrator went for one or the other kind of specialization in network security.

However, despite this new focus on network security wherein many enterprises started looking at security from a more holistic perspective, the Indian market primarily remained firewalls and anti-virus solutions-centric. This was not surprising given the fact that the increased usage of e-mails led to widespread virus attacks. Consequently, the most popular, and the most basic, security measure was deploying a firewall. There was very little business in other areas except in intrusion detection system (IDS) that emerged as an important buy for some organizations. Also, authentication caught the fancy of large software and BPO companies.

The Market
VOICE&DATA estimates that the market for network security products grew from around Rs 150 crore in FY 2001–02 to Rs 165 crore in FY 2002–03. It is surprising that the market grew by only 10 per cent despite security being a major concern among Indian CIOs.

The growth was largely on account of some major deals in the banking, finance and telecom sector. Investments in network security in these segments were primarily driven by business needs as lot of services being offered by companies in these sectors were network dependent. Of the Rs 165 crore, Rs 145 crore, i.e. 88 percent, was accounted by firewalls and anti-virus solutions (excluding desktop anti-virus). IDS, authentication, encryption, and PKI accounted for the rest of the market.

n Firewalls: A significant trend noticed in the firewall space last year was the beginning of a shift from software-based firewalls to hardware-based firewalls.

Major Product Segments
FY 2002-03 (sales-wise)
1	Firewall		80 crore
2	Anti-virus solutions		65 crore
3	IDS		10 crore
4	Others		10 crore
Total	a		165 crore
*Others include Authentication, Encryption, PKI etc.
V&D estimates		CyberMedia Research

Cisco’s Pix was the leader in the hardware firewall segment while Checkpoint was the most widely deployed software-based firewall. The third important player in this segment was NetScreen. While these three are active across the country, there are also vendors that are active in a particular region of the country. For example, Watch Guard is active in south, and Sonic Wall in west. Pix appeared to be the most deployed firewall on new networks, while Checkpoint was popular with legacy networks.

Nortel’s Alteon (a hardware platform with Checkpoint software) was a significant market entry in this space last year. Nortel’s entry in this space is logical, given the fact that firewall is increasingly being integrated into routing equipment. Also, firewall is considered a domain of routing companies.

n Gateway, E-mail, Anti-virus Solutions: As the use of e-mail became widespread and virus attacks became more lethal and complex, deploying anti-virus solutions became the top priority of those looking to secure their networks. Trend Micro was clearly the leader in the gateway anti-virus segment, followed by Symantec and Network Associates.

n IDS: The IDS market was driven by a realization among companies that it is a more important device than a firewall. ISS was the leader in this space, followed by Cisco and Symantec. NetScreen was other important player.

n Authentication: Two-factor authentication (password and token) began to be accepted as companies began to be attracted to its high-value proposition at lower costs. Software and BPO companies opened up to authentication products with some manufacturing, pharmaceutical, and banking and finance companies also showing interest. RSA was the leading player in this segment. VOICE&DATA estimates that it did a business of Rs 5.5 crore in the year 2002–03 in two-factor authentication.

Major Players
Firewall
1	Cisco
2	Checkpoint
3	NetScreen
Anti Virus
1	Trend Micro
2	Symantec
3	Network Associates India
IDS
1	ISS
2	Cisco
3	Symantec
Authentication
1	RSA

Roadblocks
End-to-end security is still not being considered by a majority of Indian enterprises. Most enterprises are content with anti-virus solutions and firewalls. Security is still not considered a critical component of the network except in the case of big companies in the banking and finance sectors. Then, there are organizations, which despite being aware of the need to go for an end-to-end security, are often constrained by the lack of resources and trained security professionals.

Also, except for a few vendors, most of them have been more interested in short-term gains by high-value product selling.

Besides, for a large number of enterprises, awareness of network security issues and challenges remains a critical issue that often leads them to believe that anti-virus solutions and firewalls were the beginning and the end of network security.

Segments like PKI failed to make any significant mark because of lack of e-business and commercial use of Internet.

Vendors to Watch For
1	NetScreen
2	Nortel
3	Crossbeam

Outlook
Today, only a small number of businesses in India are networked. However, this is likely to change in the coming years. Also, for those that are getting networked, the first priority is to build the network. They are likely to focus on security only when the network is in place. Once they start focusing on it, the network security products market will see more action. Besides, networked organizations are likely to invest in security once they begin extending and their networks to business partners (extranets) and customers (e-business).

If Networks Are All-pervasive, so Are the Threats...
As businesses become more and more dependent on networks, they become more and more vulnerable to threats and attacks from hitherto unimaginable sources. Consider these findings of the recently released Symantec Internet Security Threat Report that surveyed more than 400 companies in 30 countries:
l	On an average, companies experienced 30 attacks per company per week during the last six months of 2002.
l	Approximately 85 percent of this activity was classified as pre-attack reconnaissance, and the remaining 15 per cent were various forms of attempted (or successful) exploitation.
l	Despite the decline in the attack volume over the prior six-month period, average attacks per company during the past six months remained 20 per cent higher than the rate recorded during the same six-month period in 2001.
The same report also had another set of warning for networked companies:
l	In addition to exceeding external attacks in overall volume, the customer self-assessments of damage were particularly high for internal cases of abuse and misuse.
l	High self-reported damage estimates, coupled with relative simplicity with which the perpetrators acted, should be considered a warning sign that protecting against the internal threat is extremely important.

Ravi Shekhar Pandey