Oct 23 2011

Palo Alto Networks takes Firewalls to next Level

Category: Network security,next generation firewallDISC @ 8:50 pm

Ashlee Vance, Bloomberg Businessweek
For the past 15 years or so, security pros have relied on the trusty firewall and other hardware to keep bad guys from running amok on corporate networks. For the most part, this has meant blocking tainted e-mails and keeping workers away from harmful websites.

The latest wave of Web services, like Skype and Google Docs, has introduced fresh problems. They can transfer files, store data and allow remote computer access in ways that can’t be easily patrolled by the standard sentinels.

Nir Zuk has another option. He’s a veteran of the traditional firewall and security industry who struck out on his own six years ago to create a product for today’s Web. The company he founded, Palo Alto Networks, sells a next-generation firewall that makes modern Web services safe for the workplace and gives companies precise control over how their employees can use them.

“Our customers don’t want to block Facebook,” Zuk said. “They want to use it, but they also want some control.”

As interest in Web-based software has surged, so too have Palo Alto Networks’ sales. The company has hopped from office to bigger office since its birth at Zuk’s Palo Alto house in 2005. This year, the company moved into a giant headquarters in Santa Clara.

A year ago, Palo Alto Networks had 1,000 customers; today it has 4,500, including Qualcomm, the city of Seattle, and eBay. Sales will exceed $200 million this year, according to Zuk, who adds that the company is gearing up for an initial public offering.

Zuk says Palo Alto Networks owes much of its success to modern computing habits, which require more sophistication than what’s provided by traditional security products. Older firewalls are designed to monitor one-way traffic. E-mails and data from websites pour in, and the security products look for suspicious patterns. Yet threats can snake their way through a network in various ways: A worker might go to Facebook, click on a nefarious link, and download a virus. Soon enough, he’s using software from enterprise cloud computing company Salesforce.com to upload those infected sales data files and send them to colleagues.

“Most security groups used to focus on blocking apps like Skype or GoToMyPC but now are often required to allow them to be used,” says John Pescatore, an analyst at the research firm Gartner. “That’s why firewalls needed to evolve.”

Palo Alto Networks gives each Web service its own signature. This means that Palo Alto’s systems know when employees are using Skype or Salesforce.com, and have a general idea of what they’re doing there. Customers can set policies for how an application is used so that, for example, all employees can view Google Docs files, but only some can actually create them.

Keeping track of all the traffic flowing through a corporate network requires a lot of computing horsepower, and part of Palo Alto Networks’ secret sauce is a homegrown chip that chews through data quickly. A Palo Alto Networks system can even peer into encrypted traffic: It’s fast enough to decrypt packets of information, check whether they’re safe, and then pass them on to the employee who requested them, all without much lag.

Norm Fjeldheim, the chief information officer at chipmaker Qualcomm, says the Palo Alto Networks systems he bought replaced not just firewalls but also things such as intrusion detection hardware and other types of security systems. “They are doing the work that was done by multiple things in the past,” Fjeldheim said. “They watch over everything.”

To date, Palo Alto Networks has raised a total of $65 million. In August, Palo Alto Networks lured Mark McLaughlin from his role as CEO of VeriSign to run the young company and prepare it for an IPO.

Venture capital firm Sequoia Capital is one investor.

Said partner Jim Goetz: “I don’t think we’ve ever seen an enterprise technology company grow as quickly.”

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