"Any company that's going to be dealing with critical resource access over wireless networks needs to think about security," says Johnnie Konstantas, product marketing director at Check Point Software Technologies (CHKP
No doubt, that's the perception in the info-tech business. Check Point, known as the market leader of the high-end corporate firewall business, on Mar. 14 unveiled firewalls and communication-encryption systems, called virtual private networks (VPNs), for Pocket PC devices. Most of these handhelds, such as the Compaq iPaq, can tap into fast wireless-data connections anywhere from the local Starbucks to a corporate office.
NETWORK BLOODHOUND. The list of companies pushing bits and pieces of the wireless puzzle is a veritable Who's Who of IT services. Internet Security Systems (ISSX
), one of the largest pure-play Net security and software companies, has launched its own wireless-security practice built around a home-grown auditing device designed to sniff out vulnerabilities in a company's wireless networks. IBM has a similar device and also does audits and lock-downs of corporate wireless networks.
In December, 2001, Palm Computing spent $19 million in stock to purchase ThinAirApps, which makes security software for handheld devices. And all the big chipmakers, from Motorola to Intel to Texas Instruments, are seeking ways to incorporate security measures into wireless devices at the hardware level. That's not even counting the scores of smaller companies, such as Ecutel, ReefEdge, Ntru, and Certicom (CERT
), that offer a variety of wireless security products.
What's behind the rush? Numbers, mostly. By 2005, 50% of the largest 1,000 companies in the U.S. will use wireless local-area-network (LAN) technology, most likely built around the popular 802.11 standards, according to tech consultancy Gartner (see BW Online, 2/21/01, "This LAN Is Whose LAN?"). That's up from less than 10% today, not including unauthorized wireless networks set up on the fly by "rogue" employees.
MA AND PA WIRELESS. At the same time, home users are warming to wireless. According to Cahners In-Stat, shipments of wireless-networking hardware for U.S. consumers have soared from nearly 200,000 units in the third quarter of 2000 to just shy of 800,000 in the third quarter of 2001. These devices are becoming easier to install, and prices are dropping into the $150 range for wireless routers (computers that direct data across networks). While they're still not quite ready for every mom and pop, that day isn't too far off, either.
Another potential growth market is the small-but-growing base of mobile-phone subscribers who use cell networks for Web surfing and e-mail. Add these markets up, and it's easy to see the dollars involved. Witness Check Point's Pocket PC security software. It goes for $35 for each device it's installed on. That's doesn't cover update charges after the initial license runs out, typically ranging from one to two years.
With over 250,000 Pocket PC devices shipping each month, many to corporate warriors who'll want the kind of protection Check Point and others now offer, the math implies a current market of over $100 million in annual revenues. That should only grow as Pocket PCs and handhelds continue their phenomenal growth. And this doesn't include revenues for software designed to protect servers, digital-certificate-management for wireless networks, or hard-wired chipsets designed to stop wireless intruders. Says Check Point's Konstantas: "We think the opportunity here is tremendous."
HISTORY REPEATS. Konstantas' company has already nabbed a big customer in European drugmaker Novartis, which hopes to use the Check Point's SecureClient software on 10,000 to 15,000 Pocket PCs. Expect more companies to do the same.
So far, the spread of wireless networks is following the original personal-computer paradigm. When PCs first appeared on the scene, tech zealots in corporations had to sneak them in against edicts from on high telling workers to use mainframes. When such transgressions eventually became unstoppable in the late 1980s, IT managers decided to embrace the PC -- and that's when the huge boom in PC software and services began.
Now, too, as wireless devices and networks get easier to configure and prices fall, workers everywhere are sneaking them into the office and installing them without authorization. "IT managers see it as something that's getting out of control. Employees are taking things into their own hands. So the IT managers are saying 'Let's adopt the trend and effectively manage the wireless infrastructure,'" explains Inder Gopal, CEO of ReefEdge, a builder of secure wireless networks.
FROM FETISH TO NEED. The tipping point in this new revolution is now clearly past, and wireless networks are being rapidly adopted throughout Corporate America (with Main Street not far behind). Since each device will have access to crucial company networks, each one will need security -? sooner rather than later -- as companies scramble to protect their systems exposed to the wireless frontier.
The cost of that security will add up in a hurry. Furthermore, sales of wireless devices are now growing significantly faster than are sales of PCs and laptops as handhelds morph from fetish to road-warrior standard. With that force of technology on the loose, the push for wireless protection could supercharge growth in the computer security sector for several years to come. Salkever covers computer security issues weekly in his Security Net column, only on BusinessWeek Online