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TippingPoint eyes takeover chances in security market

James Hamilton (SUPPLIED)

By Nancy Sudheer

TippingPoint, a division of IT networking company 3Com, sees the current economic scenario as the right time to make acquisitions and expand its security solutions portfolio.

Speaking to Emirates Business during his recent visit to Dubai, James Hamilton, President of TippingPoint, said: "TippingPoint has a team developing applications in-house but we are also working on a number of partnerships. There are pretty good companies available at reasonable valuations, especially with the nature of happenings in the past 12-18 months. Talks are on and we would look at bringing them under our umbrella."

TippingPoint was the company to introduce the first Intrusion Prevention System (IPS) in 2002 in the IT security space. An IPS system responds to possible threats observing individual host and network traffic. The system is able to keep the network administrator informed as attackers can assault immediately after gaining access.

TippingPoint will be looking at making acquisitions in the DLP (data loss prevention) space. "We will be looking at other products, but DLP is a good possibility as it is a real niche product space. TippingPoint may look at this area, similar to the acquisition we made in the US in the network access control (NAC) space. These acquisitions happen only after a particular level of expertise is found in the potential company. It takes time, therefore, I cannot define the time period," said Hamilton.

In the Gulf, TippingPoint's product line has done well among telecom operators and service providers. "This region is a greenfield opportunity – like the first 10Gb implementation we had with a telecom company, which was a first of its kind in the world for TippingPoint. In terms of sales contribution, the Middle East contributes four to five per cent to our global revenue. The bandwidth requirements in the region are high, more than our global clients," he said.

He said customers in the region were thought to be conservative but are open to implementing new technologies, especially from the security standpoint.

"As operators and service providers build infrastructure and invest, it is an opportunity for us. The threat landscape is changing as bandwidth requirements change, and the market has matured and expanded. Therefore, I will be surprised if the growth figures from this region continue to be in single digits."

According to Hamilton, even the IPS business is expected to have triple digit growth over the next two to three years in the Middle East. "In the region, 90 per cent of the IPS business is dominated by us in the telecom space, especially as they are more cautious on security. This means almost all the telecom companies run TippingPoint equipment and applications."

As the company dominates the IPS space, it also receives competition from Cisco. "Nearly 5,000 customers globally use our products, which are turned on all the time and are in line with the network. The majority of Cisco products we see are not turned on and not blocking filters," he said.

The company has focused on the enterprise set of customers but is now looking at the mid-market space.

"We have a product coming out in April targeting this segment and with a lower bandwidth. Therefore, the performance and security statistics are scaled down. Our approach has always been towards enterprise and there was never a focus on the mid-market space. However, in our global customer base, the small enterprise business comprises 40 per cent and so there is a big opportunity in the mid-market as well," he said.