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SCMP Reporter

Asia is proving the strongest market for NetScreen Technologies' Internet security appliances as the global economy remains weak.

Sales in the region exceeded those in North America and Europe for the first time last quarter, NetScreen president and chief executive Robert Thomas said.

He expected the sales trend to continue this year as the Silicon Valley-based firm unveiled more hardware and software products than its competitors could match.

Mr Thomas said the company, which has its regional headquarters in Hong Kong, was positioned to consistently achieve higher growth rates worldwide than larger rivals in its industry, such as Check Point Software Technologies, Symantec and Cisco Systems.

'Overall performance in our December financial quarter was exceptional, particularly in the Asia-Pacific,' Mr Thomas said.

Global sales for NetScreen's firewall-virtual private network (VPN) security appliances for the three months to December 31 reached US$51.1 million, a 76 per cent rise year on year from US$29 million.

About 45 per cent of those sales came from the Asia-Pacific, 21 per cent from Europe and 34 per cent from North America, which is NetScreen's traditional main market.

'We had tremendous momentum during that period', when NetScreen sales across Asia also outpaced those of firewall-VPN industry leader Check Point, Mr Thomas said.

Internet security hardware platforms from vendors such as Nokia Internet Communications, Crossbeam Systems and Nortel Networks run firewall-VPN software from Israel-based Check Point.

Firewall technology guards the perimeter of a company's network from cyber attacks, while VPN provides secure low-cost connections between a private network and the public Internet.

Mr Thomas expected NetScreen to record a 'watershed year' as it planned to introduce new network security systems and appliances that were about 18 months ahead of those being developed by its rivals.

NetScreen's scheduled product releases include upgrades to its Internet security appliances, which will integrate intrusion detection systems (IDS) technology from OneSecure, an Israeli company it acquired last year.

Also in the works are stand-alone IDS systems based on OneSecure technology and version 5.0 of NetScreen's network security management software.

By the end of this year, NetScreen expects to introduce an application-specific integrated circuit (ASIC) that will fuse its firewall-VPN systems with OneSecure's IDS platform to provide an added layer of data security.

The ASIC chip would be at the core of a new Internet gateway appliance that integrated 'real best-of-breed security technologies as required by service providers, governments and businesses of all sizes', Mr Thomas said.

He said NetScreen, unlike rivals such as Symantec, provided an integrated Internet security appliance with 'purpose-built, carrier-grade and easy-to-use architecture' that was flexible to integrate with other high-end and future security technologies.

He also said NetScreen's future product development would involve deeper integration into the network, which meant new products would become part of the back-end infrastructure rather than 'bolted-on components' to a network.

NetScreen estimates its revenues will reach between US$225 million and US$230 million in the financial year to September 30, representing year-on-year revenue growth of 62 per cent to 66 per cent.

'With consistent growth, we hope to be on track to generating annual revenues of US$1 billion within the next five years,' Mr Thomas said.

In November, research firm International Data Corp reported that NetScreen was the fastest-growing vendor in the firewall and VPN appliance market, with a 47 per cent share for Internet security appliances priced at US$50,000 and above used by large enterprises and service providers.

In Hong Kong, NetScreen resellers included PCCW and Automated Systems. A prominent government customer of NetScreen is China's Ministry of Information Industry.

NetScreen was co-founded in 1997 by former Intel chip designer Feng Deng and former Cisco software engineer Yan Ke, both graduates of China's Tsinghua University, who developed the company's ASIC-based, integrated Internet security platform.

Nasdaq-listed NetScreen has a global staff of about 500 covering more than 60 countries.



Asia offers bright spot for NetScreen