Check Point To Launch Cloud Security Offering Focused On Safeguarding IaaS, SaaS Applications

Check Point Software Technologies will formally roll out a cloud security offering next week focused on monitoring IaaS services and preventing account takeover.

The San Carlos, Calif.-based enterprise security vendor said the launch of its CloudGuard offering at next week's CPX 360 conference in Las Vegas will also enable the utilization of Check Point's advanced threat prevention tools around the most common SaaS applications.

"For many years, people have considered securing SaaS applications to be mission impossible given the fact that these are closed application environments that aren't too open to change," CEO Gil Shwed told Wall Street analysts Wednesday morning, while discussing the company's fourth quarter financial results. "I believe we're ready to start making this impossible mission possible."

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Shwed said CloudGuard will address a key vulnerability of the cloud environment, which is that it's open to account takeover. As part of the offering, Shwed said Check Point will roll out new technology that combats account takeovers by verifying a match between the device and user in a way that the industry hasn't seen before.

The offering will also apply the most sophisticated threat prevention services to cloud applications, Shwed said. Files that are uploaded, downloaded, or sent through cloud applications will be checked using Check Point's most advanced threat protection or SandBlast technologies to prevent malicious files from getting through, according to Shwed.

"This is a really revolutionary model," Shwed said .

CloudGuard will additionally unify more security technology for IaaS environments. Shwed said that infrastructure providers such as Amazon Web Services and Microsoft Azure have many services that need to be secured and monitored.

"We believe that the majority of big data breaches last year were the result of weaknesses in cloud security," Shwed said. "Cloud has captured the attention of the audience and gotten a high level of interest."

Check Point might be the best in providing threat prevention, intrusion prevention, and network security capabilities for the cloud, but Shwed said securing the cloud requires much more than that.

Unlike in an enterprise network, Shwed said securing the perimeter doesn't make cloud applications or infrastructure less susceptible to attack. In fact, Shwed said, virtually all of the cloud services being utilized by the customer are exposed to the mainstream of the public internet.

Most of Check Point's large enterprise customers still have IT infrastructure in private data centers or the private cloud rather than the public cloud, Shwed said. Almost all of them are experimenting somewhat with public cloud, Shwed said, but most of their infrastructure isn't there yet.

"They are really in their infancy of adoption," Shwed said.

A handful of Check Point customers, both large and small, have built significant operations on the cloud, Shwed said. But these folks typically aren't yet big consumers of cloud security services, which Shwed said represents an opportunity for the company.

Check Point has competed with the likes of IBM, HP and Microsoft over the past quarter-century as pretty much every networking, OS, or applications vendor thought they could also be a security vendor, Shwed said. But none of them were successful, Shwed said, since security needs to grow beyond the other technologies a vendor provides and should be managed and applied on a cross-platform basis.

There's definitely a risk around IaaS given the security-related moves public cloud providers have already made, but Shwed said Check Point isn't trying to simply copy the security it had on the traditional network and apply it to a cloud environment. Instead, he said, the company is trying to build new technologies and models that combat security risks that are unique to the cloud.

"I still think there's going to be an opportunity for security in the cloud," Shwed said.

Check Point's revenue in the fourth quarter ended Dec. 31 climbed to $506 million, up 4 percent from $486.7 million the year prior. This fell short of Seeking Alpha's estimate of $508.6 million.

Net income for the quarter jumped to $239.3 million, or $1.46 per diluted share, up 7.8 percent from $222 million, or $1.31 per diluted share, in the same quarter last year. On a non-GAAP basis, net income came in at $259.2 million, or $1.58 per diluted share, up 4.9 percent from $247.2, or $1.46 per diluted share, the year before. That crushed Seeking Alpha's projection of $1.50 per share.

For all of 2017, Check Point recorded sales of $1.85 billion, up 6.5 percent from $1.74 billion in 2016. Net income came in at $802.9 million, or $4.82 per diluted share, up 10.8 percent from $724.8 million, or $4.18 per diluted share, in 2016

Check Point's stock price fell $2.51 (2.40%) to $101.90 in pre-market trading. Earnings were announced before the market opened Wednesday.

Check Point's software updates and maintenance sales in the fourth quarter jumped to $210.3 million, up 5.6 percent from $199.2 million last year. The company's products and licenses practice saw sales tumble to $165.7 million, down 6.4 percent from $177.1 million the year prior.

Most of Check Point's growth in the quarter, though, was driven by security subscriptions, with year-over-year sales climbing to $130 million, up 17.7 percent from $110.5 million last year.

The company reported increased interest in large deals, with customer transactions worth more than $1 million climbing to 110 from 99 the year prior, despite headwinds in the United States. Seventy-five percent of Check Point's client deals were worth more than $50,000, according to CFO and COO Tal Payne.

For the coming year, Shwed said Check Point expects to deliver earnings of $5.50 to $5.90 per share on sales of $1.9 billion to $2 billion. Thomson Reuters had been projecting earnings of $5.73 per share on sales of $1.97 billion.