Big Times for SSL VPNs – NetScreen Acquires Neoteris
The news of the week in the network security industry is NetScreen’s announcement on Monday, October 6, to acquire Neoteris. For industry insiders, this move was highly anticipated and no big surprise, however, it has significant repercussions to the SSL VPN market.
As a background, NetScreen is one of the top vendors in the firewall/VPN appliances market, competing head-to-head with Cisco Systems and the Check Point/Nokia duo (Check Point software on Nokia appliances). NetScreen’s differentiation against other firewall/VPN vendors is its use of Application Specific Integrated Circuits (ASICs) to deliver faster performance than the traditional software approach.
In 2003, there have been two major trends in the firewall/VPN market. First, firewalls have been getting more intelligent with application layer filtering and intrusion prevention capabilities being integrated into the appliances. NetScreen identified this weakness in its product portfolio, and acquired OneSecure in September 2002.
While most of NetScreen’s competitors have followed suit and are working to integrate application inspection into their stateful packet inspecting firewalls, NetScreen has taken the next step by following the second major industry trend: the inclusion of SSL VPNs alongside the IPSec VPN product offering. SSL VPNs enable companies to offer remote access to a large number of users without the administration issues or high cost normally associated with IPSec VPNs. Additionally, SSL VPNs don’t usually require client software, and when they do, it is a thin-client, not requiring end-user interaction or set-up. While SSL VPNs have many benefits, IPSec VPNs are still best for connecting together corporate networks, or site-to-site VPNs.
For Netscreen, having both types of VPNs allows them to go to their customers with a full solution, enabling them to (eventually) seamlessly set up both VPN types for the different user groups within the company. While Nortel and Nokia also dabble in both IPSec and SSL, NetScreen’s offering will be the first fully functional offering that will bridge the two technologies as they go-to-market. While Nortel has had some success in IPSec VPNs, its SSL focus has predominantly been on SSL acceleration and termination. Nokia, on the other hand, has come up with its own SSL VPN technology, however it relies on Check Point for the IPSec VPN technology. NetScreen’s top competitor, Cisco, hasn’t yet announced any plans to build or buy SSL VPN technology.
This acquisition makes sense for Neoteris, as well. The established reputation of NetScreen can help Neoteris products get into more places, and use NetScreen’s strong channel into international markets. Also, NetScreen’s already developed relationships with managed security service providers will help to get the Neoteris products into the services market, poised to compete against SSL VPN services pioneer Aventail.
Neoteris leaves behind a decent-sized group of start-ups offering SSL VPNs, including Aspelle, Whale Communications, Aventail, Array Networks, Netilla Networks, SafeWeb, AEP, and URoam. These vendors are going to have to work a little harder now to compete against NetScreen’s superpower.
NEC Electronics Expands Partnership With Virage Logic To Include NVM Technology
Six months after its initial contract for embedded SRAM memories, Virage Logic Corporation announced that it has expanded its licensing agreement with NEC Electronics to include Virage Logic’s Non-Volatile Electrically Alterable® (NOVeA) embedded memories. NOVeA is the first embedded non-volatile memory (NVM) that is manufactured on a standard CMOS logic process without any additional masks or process steps. NEC Electronics has qualified Virage Logic non-volatile memories for its 0.15-micron CMOS logic process in order to enable applications requiring cost-effective embedded NVM for security, encryption, unique device identification, trimming, and repair.
“Virage Logic’s unmatched support combined with their leadership in innovative embedded memory design has enabled us to drive down not only the overall cost and size of the system, but also helped us get to market more quickly and efficiently,” said Mr. Takatoshi Koga, general manager, 2nd Custom LSI Division, NEC Electronics. “We selected the NOVeA embedded memories because enhanced security measures such as key encryption storage are critical for many of our applications. With NOVeA, we now have the ability to securely encrypt information regarding viewing preferences which is critical, especially in some of the emerging markets we are targeting.”
As we have stated in many reports published in In-Stat/MDR’s Digital Engines Service, in an increasing number of applications, it is far more desirable to have non-volatile memory (EEPROM or flash), than to have volatile memory, such as SRAM or DRAM. In this analyst’s opinion, in the future this migration from embedded volatile memory to embedded non-volatile memory, will only increase, and for those who can offer this technology, without the requirements of additional processing, and hence, cost, will find themselves in a very enviable position.
- Jerry Worchel - Senior Analyst
, E-mail:jworchel@reedbusiness.com
A Tale of Two Cities: LA and Redmond and the Future of the Digital Home
Last week, in two cities about 1000 miles apart on the west coast of the United States, two visions of the connected home were discussed. In LA, in the halls and on the panels of the Digital Hollywood conference, the visionaries of the content world shared their views on how broadband and networking technology would impact the way content is consumed by the end user. In Redmond, Washington, Microsoft demonstrated its newest version of Media Center PC operating system, giving a glimpse into its vision of the PC as the center of the future digital home. And while there were some similarities, there were definitely some stark differences in the two worldviews.
In LA, with representatives from studios, music companies, consumer electronic vendors and even a few PC companies, the predominant view was that ground zero for the digital media sharing revolution in the home will be in the entertainment center. There were at least three panels that centered on the view of the digital media hub (or media server, or media gateway, choose your term), and for the most part these companies believed the box would be some form of set top box or TiVo like device. Some even discussed the gaming console, a thought given weight this week when Sony announced more specifics and pricing on its PSX gaming console, a souped up PS2 with a TV tuner and DVD player.
In Redmond, Microsoft raised the curtain on its Media Center 2004. And while this version did not take the next step yet in making the PC a whole home media server – the device is still primarily pushed as an in-room media hub – the direction of Microsoft’s vision of the PC as the central media device is clear. Media Center PCs will come with a DVD burner, a TV tuner accompanied by TV recording software (a la TiVo), and bundled with software for CinemaNow and Movielink for digital downloads of movies, as well as the revamped pay-for Napster service from Roxio. Movies will be viewable through Microsoft’s own Media Series 9 player.
What may be even more interesting than the features on the second-generation Media Center was who was included in the announcement. Sony and Dell, two companies who didn’t participate in the first version, have jumped on board for the second go around. Sony is perhaps the most intriguing, a company clearly with its own vision of where the future of the media networked home will go, one that probably doesn’t center around a Microsoft-run PC. For its own purposes, Dell had launched its own line of media centric PCs as well as announced its intentions to enter the consumer electronics market, but couldn’t resist the momentum Microsoft had behind this newest Media Center edition.
The Digital Hollywood panelists did give grudging acceptance to Microsoft as a player in the future digital home, but no one really discussed the Media Center PC and its implications. Perhaps this will change in about twelve to eighteen months when Microsoft launches its next version of Media Center, which will center around the company’s next generation operating system, code named Longhorn, and will be more focused on delivering whole-home delivery of content. This move into the living room will also coincide somewhat with the delivery of the next generation X-Box, which also likely be a good candidate to perform as a media server and also as a receiver in the living room for Media Center PC content.
In the long run we suspect that both the PC and new entertainment appliances will both have their place as media servers in the digital home, and many homes will have versions of both. In 2003 the formation of the Digital Home Working Group was a key sign of the increased cooperation of the PC and consumer electronics world, and in the coming year, particularly at CES in January 2004, there will be a large number of companies showing off their wares of new and interesting networked entertainment devices.
In the small business market (firms with 5 to 99 employees), mobility seems to be the most common “issue” for decision-makers, rather than remote access, as is the case with larger firms. Accordingly, when queried on their key telecom challenges this year, small business decision-makers indicated several, but three stood out – one in particular. The largest portion of small business decision-makers, 55%, reported that “wireless services” are a key concern or issue, highlighting the need for mobile accessibility, at least to voice. These results may suggest that small businesses are looking to increase their use of wireless services, and more likely, are looking for ways to make sense of and leverage the variety of data-related wireless now available on mainstream networks.
Also of interest, “telecom cost reduction” was the second-most commonly cited response, as would be expected, indicated by 47% of decision-makers. However, considering the state of the economy – far from “fully recovered” – this percentage is actually quite low. Possibly, these data suggest that most small businesses are in telecom “invest” mode, looking for ways to improve their competitive advantage, productivity, etc. using the variety of telecom services and solutions available today. Approximately 46% of respondents reported “remote access” as a top challenge, while other telecom challenges include “provider stability” (36%) and “site-to-site connectivity” (28%).
For further information on small business telecom trends and expenditures see: “What's Next?: Telecom Trends and Expenditures in the US Business Market, Part Three: Small Businesses (5 to 99 Employees),” report #IN0301135SB at :http://www.instat.com/catalog/Pcatalogue.asp?id=90#IN0301135SB
- Jeff Wilson - Industry Analyst
, E-mail:jwilson@reedbusiness.com
Image Sensor Market Continues to Show Strong Growth
The market for image sensors, the heart of digital cameras, has seen significant growth over the past year, with Charge-Coupled Devices (CCDs) seeing particularly large growth. The death of CCDs has often been greatly exaggerated by the manufacturers of rival CMOS sensor technology. Growth in the digital still camera and mobile phone camera markets has driven CCDs to renewed industry dominance, both in unit shipments and revenues. CCDs have also maintained strong positions in markets where they are traditionally strong, such as camcorders and security cameras.
CMOS image sensors have achieved steady growth due to markets such as PC cameras, low-end digital still cameras, and dual mode cameras – those devices that combine digital still camera and PC camera functions. CMOS is also a strong competitor in the market for mobile phone cameras.
Mobile phones have long been seen by image sensor manufacturers as a key to future growth. The future has arrived, as camera phones are expected to be the single largest application for image sensors in 2003. The initial expectation was that CMOS sensors, with their low cost and low power consumption, would dominate this market. However, due to their ability to deliver superior image quality in nearly all lighting conditions, CCDs shipped in a majority of camera phones in 2003.
In the market for linear image sensors, for applications such as fax machines and scanners, CCDs have long been challenged by Contact Image Sensors (CIS), a more integrated, lower cost solution. CIS’ challenge has forced linear CCD manufacturers into lowering prices over the last two years.
According to the recently released In-Stat/MDR report, “CCDs & CMOS: Zooming in on the Image Sensor Market,” the market for all types of image sensors is expected to grow at a 28% annual rate through 2007 – you can view the contents of this report at: http://www.instat.com/catalog/Ccatalogue.asp?id=161#IN030702MI
- Brian O'Rourke - Senior Analyst
, E-mail:borourke@reedbusiness.com
A strategic alliance was announced between the VSI Alliance (VSIA), an industry association chartered with developing open standards for SoC development and IP integration, and OCP-IP, a premier industry organization chartered with developing the open core protocol (OCP) as the industry accepted socket standard. The purpose of the alliance will be to jointly support the OCP socket and socket interface as an industry standard.
Under this agreement, VSIA now endorses the OCP socket and OCP-IP becomes the first VSI Alliance Adoption Group continuing to focus on tools and support to promote the adoption of OCP. Additionally, OCP-IP receives stewardship of the previously developed VSIA Bus Attributes Specification and VCI Bus Interface Standard. As a result of this agreement, VSIA members are granted free access to the OCP Standard. In anticipation of this agreement, OCP-IP has already merged the essential features of VCI into OCP2.0
“OCP-IP has done a tremendous job in gaining industry respect and momentum for the OCP Standard. We endorse this standard and support its adoption through the formally identified Adoption Group,” said Michael Kaskowitz, VSIA President. “We will be announcing other Adoption Groups that will support industry standards developed by VSIA or other respected groups. As the only open, fully supported industry standard socket, it is a natural evolution that the OCP standard is endorsed by VSIA,” said Ian Mackintosh, president of OCP-IP. “We look forward to continuing our already extensive work in evolving the OCP Standard and its supporting infrastructure and hope that this example will lead the way for similar industry collaborations.”
With all the standards and protocols, already in existence in our industry, it is becoming a necessity, and not just desirable, for alliances to be formed between the various standards organizations currently in existence. In addition, with technology evolution advancing at an ever-quickening pace, alliances are a far better alternative to standardizing the various protocols that exist. For if each company (or organization) goes its own way, the problem of two functions being able to communicate with one another becomes more unlikely, without a lot of additional effort.
Microsoft TV recently announced their IPTV initiative, where they will work with telecommunications and broadcast network operators to develop end-to-end Internet protocol (IP)-based TV solutions, which can be used on both copper and cable TV networks. The goal of their IPTV solution is to enable instant channel changing, multiple pictures-in-picture, easy media navigation, and the connection of the TV to the PC and other networked devices in the home. Another specific long-term goal of the IPTV initiative is to leverage deployments of Microsoft’s Windows Media 9 technology into wins for Microsoft’s IPTV software.
In the coming months, Microsoft will work with both set top box manufacturers and IC suppliers to integrate its software into their products. They will also work with network operators on their IPTV lab and market trials. Bell Canada will be the first North American company to work with Microsoft’s IPTV solution. In India, Reliance Infocomm will jointly test, develop, and deliver IPTV services with Microsoft on Reliance’s network. Commercial availability of the IPTV solution is slated for the second half of 2004.
Although today’s IPTV market is small and relatively experimental, it is also a market that has a great deal of potential. While In-Stat/MDR does not see much short-term interest from cable operators in moving to IP, many telco-delivered video deployments are using IPTV technology. Over the longer-term, the cable industry looks like a prime target for IPTV solutions and services, as today’s cable TV operators increasingly talk about futuristic “all digital” networks based on IP technology.
Microsoft readily admits that their IPTV strategy is a long-term strategy, but with the world’s leading software developer as an evangelizer for IPTV, we expect that the market will receive a great deal more attention than it has in the past.
This week marked the official release of Nokia’s new game-platform/entertainment console/mobile phone. Called the N-Gage, it’s a nifty handful that works hard to live up to its many different jobs. The list of functions and features for this device includes FM radio, MP3 player, Bluetooth, 3D game-play, and, lest we forget, it’s a tri-band world phone too. It’s quite impressive, and given the marketing push that Nokia has put behind it, leading up to its launch this week, it will certainly be noticed.
The question on most observers’ minds is can N-Gage really succeed in forging a new market for mobile phones, and at the same time compete successfully against Nintendo’s GameBoy? A number of other companies have tried, and failed. Remember Ericcson’s Red Jade game platform? Probably not, but that device was even more advanced than the N-Gage (admittedly, Red Jade was folded by Ericcson before launch, as the company was suffering a $2.4 billion loss and was cutting costs wherever it could, but the move still reflects a lack of confidence in the ability of a mobile phone manufacturer to succeed in this space).
Nokia announced its N-Gage program last spring. A first look revealed that the N-Gage had strong potential, but also some potential flaws that might limit its uptake. Many initially thought that the game decks that Nokia was showing were first-generation “Alpha” units, but subsequent viewings, including a unit provided to In-Stat/MDR for review, show that little has changed. That means that many of the most impressive aspects of the deck remain, as well as a few less than impressive ones.
The N-Gage resembles a typical console-game controller, and is meant to be held horizontally, rather than vertically, unlike typical phones. Besides the normal telephone keys, which are placed to the right of the center screen, there are several other buttons that control game play, turn on the radio, the MP3 player, and bring up additional menus. Several keys have multiple functions to support game-play.
Most innovative for the N-Gage is its introduction of 3D gaming in a hand-held. 3D greatly enhances the playing experience. Combined with its crystal clear screen, games on the N-Gage look much better than games on a GameBoy. Unfortunately, despite signing several high-profile game publishers to make games for the N-Gage, very few titles are actually available (only 7 at launch, with another 7 or 8 to be introduced over the next few months). On the other hand, there are several hundred games available for the GameBoy.
One startling gaffe by Nokia in the design of the N-Gage is how games are loaded onto the device. Users must first turn off the device, remove its back cover, remove the battery, and then, finally, remove the game cartridge and insert another. Nokia explains this absurd process by stating that it wanted to ensure the game cartridge won’t be dislodged during vigorous game-play. Oddly enough, this problem doesn’t seem to have affected game-play for millions of GameBoy users – game cartridges on the GameBoy are inserted directly into the bottom of the deck.
The N-Gage will retail for $299 in the United States, and so far, there has been no talk of discounts. N-Gage’s high price will prove a barrier to acceptance. According to game developer THQ’s CEO Brian Ferrell, speaking about Red Jade in an article in CNNMoney , a retail price of $200 to $300 automatically cuts the addressable market for the game platform by 50% to 75%.
Inevitably, Nokia, and its carrier customers will have to cut prices for the N-Gage. It’s chief competitor, the Nintendo GameBoy Advance, and GameBoy Advance SP, sell for a quarter and a third, respectively, of what the N-Gage goes for. Even though Nokia is targeting an older age group (college students and young professionals), while the GameBoy’s core market is pre-teens and teenagers, price will remain a big barrier.
One of Nokia’s arguments in support of the N-Gage’s higher price is that it’s not just an advanced gaming platform, but it’s a fully functional phone as well. However, its odd shape, while good for a gaming device, looks distinctly strange when held to the ear – rather like half of a Belgian waffle held on end against one’s head. While techno-geeks might not mind making a breakfast-pastry fashion statement whenever they use the N-Gage to make a call, most others will likely use the supplied headset whenever they need to use the phone.
Assuming Nokia and its carrier partners can bring the price of the N-Gage down, and they get additional titles to the market fairly rapidly (the buzz surrounding current and planned titles is extremely positive), the N-Gage has a fair chance of success. However, the current device is strictly a first-generation product, and until a second generation of N-Gages is introduced, don’t expect Nintendo to be quaking in its boots.
Unfortunately for Nokia, established game companies Sony and Nintendo have both signaled that they do not intend to secede the wireless gaming space to Nokia. Sony recently announced a local-area-wireless gaming platform to come next year, and Nintendo announced that it would be adding wireless capability to the GameBoy Advance SP as well. Obviously, both companies think enough of the N-Gage to attempt to pre-empt it before it gets traction. The race is on, and it will be interesting to see who will succeed.
