NetScreen Goes Carrier-Grade

NetScreen Technologies Inc. (Nasdaq: NSCN) today introduced a line of high-speed security firewalls targeted at large companies and telecom carriers.

The product is already raising eyebrows, as it pushes the speed limits at the highest end of the firewall market. The company says that its new NetScreen-5000 series will deliver firewall speeds of up to 12 Gbit/s and virtual private network (VPN) speeds of up to 6 Gbit/s.

The series, which is NEBS compliant, includes the NetScreen-5200, a two-slot box that supports up to eight Gigabit Ethernet interfaces, and the NetScreen-5400, a four-slot, 5-unit-high box with a maximum combination of 78 Gigabit Ethernet and Fast Ethernet ports (see NetScreen Intros Security Lineup). The series is based on NetScreen’s new chipset, the GigaScreen-II ASIC (application specific integrated circuit).

NetScreen claims its custom chips continue to differentiate the product from its competitors.

"There is a big difference between NetScreen and its competitors,” says David Flynn, vice president of marketing at NetScreen, “and the 'secret sauce' is the ASIC.”

Observers say NetScreen performance promises are impressive. “I haven’t seen anybody with 12-Gig,” says TeleChoice Inc. analyst Jeff Phillips. “That’s insane. They’re definitely keeping ahead of the curve."

The move shows that NetScreen, which went public last December (see NetScreen's Screaming IPO), is following up on its promises to mix up the security market with a brand of high-performance products.

"NetScreen is in there shaking things up for the big established players like Cisco Systems Inc. [Nasdaq: CSCO], Check Point Software Technologies Ltd. [Nasdaq: CHKP], and Nortel Networks Corp. [NYSE/Toronto: NT]," says Giga Information Group Inc. analyst Jim Slaby. "Their processing in silicon allows them to give butt-kicking performance at very attractive prices."

Customers are in the works. According to Flynn, four different customers have ordered products from the new 5000-series, and, he says, the company expects to see a significant number of carriers signing on. “We anticipate having some nice customer announcements soon."

NetScreen won't disclose the identities of its new customers, but one small Nordic service provider with about 1,000 employees is talking. “We are extremely happy with NetScreen,” says Thomas Edeberg, the business area manager for the Norwegian division of Song Networks Holding AB (Nasdaq: SONW). “We started by buying one [NetScreen-1000] about a year and a half ago. Now, we’ve bought two more, and we’re negotiating to buy a 5200.”

While NetScreen is indeed managing to challenge the “Goliaths” in the firewall/VPN market, like Cisco, Check Point, Nokia Corp. (NYSE: NOK), and Nortel, the company still has to keep an eye on other competitors and startups that are hungry for a piece of its market share. If NetScreen wants to stay ahead of the game, says Current Analysisanalyst Joel Conover, it will have to keep up the constant flow of innovative product and platform announcements. “It’s right at the center of the bullseye in terms of being targeted by companies that want to get their hands on its market share,” he says.

Avaya Inc. (NYSE: AV), Crossbeam Systems Inc., Quarry Technologies Inc., RapidStream Inc., ServGate Technologies Inc., and WatchGuard Technologies Inc. (Nasdaq: WGRD) are among the companies competing with NetScreen for marketshare.

Many analysts expect them to move into security areas other than firewalls and VPNs.

“It’s a definite possibility,” says Burton Group analyst, Dave Kosier. “Intrusion detection and virus protection is something NetScreen will have to do if it wants to keep up.”

”What I see going forward, is that not many people are going to need 12-gig worth of just firewall or VPN,” TeleChoice's Phillips says, pointing out that the flexibility of the new ASIC could allow for multiple service applications to fit on the same box, thus making good use of all the gigabits.

“The real issue long-term is how many really large enterprise customers they can not only win, but also keep happy," says Giga Information Group's Slaby. "That will decide [whether or not] they can move into the top tier."

The NetScreen-5200 is available today, with prices from $99,000 and up, and the Netscreen-5400 will be available in the third quarter of 2002.

— Eugénie Larson, Reporter, Light Reading
http://www.lightreading.com