Security businesses move ahead in this economy

While the publicly held security companies are posting surprisingly good numbers in the face of a dour economy, privately held VC-backed companies are finding a tough time closing new rounds. This is not necessarily a bad thing - if a company is not getting market traction after a couple of years there is no reason to throw good millions after bad to keep the vendor on life support. That is especially true with the pressures on the VC business model due to greater expenses carrying companies longer until they can exit, reduced values of profitable exits by acquisition, and limited partners whose net worth fell with the stock market are not anxiously responding to calls for investment cash.

Still, there are areas that look interesting even in this economy:

The corporate technical infrastructure is moving increasingly into the cloud to meet business demands for establishing quality service relationships with customers. The emphasis on data center to browser connectivity completely challenges the old models of perimeters and gateways. For instance, believe it or not, firewalls become much less important in the new world while accelerators, load balancers, and performance management are gaining in importance. Riverbed's acquisition of Mazu promises to help penetrate deeper into accounts starting on the outer layer with acceleration boxes. We will see huge innovation with virtual desktop services and intelligent cache management to further this megatrend.

Organizations will consolidate their management tools, enabling the technology to move to small and medium sized businesses. The old SIEM model of discovering attacks is becoming passé - it is the job of Anti-X products to discover attacks. IT does need common tools to control policy compliance for configurations of sensitive servers, identity and access control parameters, application performance, and log management to document the extent of a policy violation. Companies like eIQ Networks and Virtual Computer closed funding rounds because they aim their investments at helping manage business performance with strong security features - different than leading with security for security's sake.

Powerful handhelds will change the model of endpoint management. We already see widespread access to corporate applications, mail and sales databases, through phones with great displays and plenty of flash memory. Corporations do not need to repeat the old mistakes of managing software configurations when virtualization schemes will separate personal and professional uses. Technology advances in high performance bandwidth including through the air, compute power in the hands of the user, and dynamic data centers allow IT to re-think the way applications are delivered to users. These infrastructure changes are being driven by the major infrastructure players, including Cisco , Citrix, HP, IBM, and Microsoft.