Check Point Grabs Nokia’s Security Appliances

Network security vendor Check Point is expanding its hardware profile with the acquisition of Nokia’s security appliance business — a move that could see it gaining new capabilities to compete against Cisco and other big players in its space.

With the acquisition, Check Point (NASDAQ: CHKP), which makes security software — intrusion prevention, unified threat management, firewall and VPN software — will take over a business that already includes many Check Point users, since Nokia’s appliance is typically resold running with Check Point’s software, they said.

About 220,000 of the 700,000 Check Point security gateways are deployments in connection with Nokia security appliances, which the two companies said are installed at over 23,000 customers globally.

“These Nokia customers are all our customers and we already provide service and support to many of them,” Dorit Dor, vice president of products at Check Point, told

The deal, financial terms of which were not disclosed, could help to bolster Check Point’s overall market positioning as it competes against Cisco (NASDAQ: CSCO), Juniper, SonicWall and others in the increasingly competitive network security space.

Through the deal, Nokia benefits by offloading a unit that’s outside of its primary business. The Finnish mobile phone giant first publicly stated that it intended to sell its security appliance business in September as part of a broader shift to focus on its core mobility business.

Dor said the acquisition would benefit Check Point’s users by offering them more choice, as well as expanding Check Point’s hardware knowledge and capabilities. For instance, Check Point can now offer a single-source solution that might play an important role in larger sales.

“This gives us the ability to approach a customer for a larger deal and gives us more flexibility,” Dor said. “The ability to serve our customers better is what this deal will do for Check Point.”

That’s critical for gaining ground in a hotly contested space.

“In terms of our offering versus the competition, at the end of the day, [it] depends on loyal customers and happy customers,” Dor said.

Continued focus on multiple platforms

Thanks to their existing relationship, the deal should allow Check Point to pick up where Nokia left off with its appliance business, which relied heavily on Check Point’s software.

“Nokia … provide[s] a hardware appliance platform with an operating system on top which the Value-Added Resellers ship with our software,” Dor said. “As a result, customers get a unified solution. With this model in mind, Nokia appliances run most of Check Point’s software products on them.”

While Check Point is generally known as a software company, it’s also operated a hardware business — efforts that Dor she sharing a lot of synergies with Nokia’s hardware unit.

However, she admitted she isn’t sure yet how the Nokia products will be integrated into Check Point’s future hardware lineup. For the time being, Check Point has committed to supporting existing Nokia’s customers.

“There are a lot of synergies in the technology, and one day, we will provide seamless support for customers,” Dor said. “In the future, we will try to give the best of all worlds, but the integration plans still have to be finalized, which will happen when the deal closes in Q1 of 2009.”

One thing that customers won’t see happen is a radical revamping of the company’s strategy. Check Point’s approach to the market has long centered on security software that runs on multiple platforms. Dor argued that even with the Nokia acquisition in place, the company’s focus will remain on open platforms.

“The value add of Check Point will continue to be on the software side,” Dor said. “On the other hand, our customers need a choice of platforms, we serve our customers by enabling them to buy open platforms and to select from partners as well as selecting from our own hardware. From that sense, our business will not change.”

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