Enterprise Network Security In Cloud Computing And Virtualization - Todd C. Weller - Stifel, Nicolaus And Co., Inc.
November 22, 2011 - The Wall Street Transcript has just published Internet Services Report offering a timely review of the sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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Todd C. Weller, CFA, joined the Stifel, Nicolaus & Co., Inc., research team in connection with Stifel's acquisition of Legg Mason's capital markets group in December 2005. Mr. Weller covers the software and Internet infrastructure sector with a current focus on data centers, managed/cloud hosting and security. Before joining Legg Mason in 1998, he was an Associate Analyst at Prudential Securities covering companies in the Internet and electronic commerce sector. Before that, Mr. Weller was a Research Assistant at BT Alex. Brown, Inc. He was ranked first for earnings accuracy and third for stock picking in the software industry and second for stock picking in the health care technology industry by the Financial Times/StarMine in 2009, when he was also ranked third for stock picking in Internet and computer services by The Wall Street Journal. In 2008, he was ranked second for earnings accuracy in the software industry by the Financial Times/StarMine. Mr. Weller has a B.A. in economics with certificates in finance and management science from the University of Maryland, Baltimore County, and an MBA from the University of Maryland, College Park.
TWST: What are the most significant trends with regard to security as it relates to the cloud?
Mr. Weller: So the cloud, we think of two perspectives there. One, cloud security, so you have many of the security vendors offering their security solutions or services via a cloud delivery model. So for example, instead of Web filtering, which is a software that organizations use to control which Web sites employees go to, instead of deploying that capability locally on premise, you consume that via a cloud-based service. So that's one angle in security - vendors offering their solutions via a cloud delivery model. And then you have the other angle, which is that you have more enterprises and consumers using cloud services, whether that's software as a service, compute as a service or storage as a service.
So all of a sudden, the problem of how do you secure your applications and your data in the cloud becomes an issue as well, and so you see a focus there by companies around encryption, for example, making some of the data encrypted before it goes through the cloud is one way to deal with that. There is also a focus on authentication and making sure the appropriate people are accessing data. Again, I would say security in the cloud, securing data in the cloud, it's still pretty early stage, and there are still topics around who ultimately has control of the data. Is it the corporation or is it the service provider, and what are their respective roles with respect to security?
TWST: Would you say your whole group serves that market or is there anybody who is ahead of the pack?
Mr. Weller: Yes, so if you think about it within our coverage, I mean, Check Point's offer is predominantly network focused, though they do also offer endpoint capabilities. Websense (WBSN) is more of a Web security player, and BlueCoat (BCSI) plays there as well. So the only security company that has a significant kind of data protection play is Symantec. They are obviously a large company with a lot of different components to their business, but they have an encryption piece with PGP acquisition that they did, also GuardianEdge. They have authentication that they acquired from VeriSign (VRSN). So within our coverage, Symantec has the most exposure to data security. There is a company that has filed to go public called Imperva. They do Web application firewall, database security and file security. So that's a little bit of more of what I would say is a pure play on data security.
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