The Daily Incite - September 12, 2007
September 12, 2007 - Volume 2, #131
Good Morning:
Happy Birthday to Lindsay and Sam. That's right, my twins turn 4 today.
It's kind of anti-climatic a bit because we had the big birthday
blow-out last Saturday, but we'll still have a fun day. I'll make an
appearance at the twins' school and we'll do a cake and the like.
That's one of the best things about working for myself - I can blow out
for an hour or two during the day and hang with the family.
The Boss and I actually picked September 12 as the twins' birthday.
Since there were two of them and it was a high risk endeavor, the Boss
had a scheduled C-section. We were pretty set against having them born
on September 11. It didn't make sense to be trying to celebrate birth
and mourn death on the same day - not if we didn't have to anyway. Even
six years later, Sept 11, 2001 is still firmly etched in my mind.
I remember flying into Boston (I was working at SHYM at the time) that
morning. I remember heading into the office and hearing some buzzing
about planes and the World Trade Center. I remember watching the towers
fall on my CEO's handheld TV that he takes to Pats games. I remember
trying to get in touch with my folks to let them know I was OK. I
remember being stuck in Boston for 4 days and having to take the train
back to DC. I remember everything and odds are I won't forget. I hope I
don't forget.
My condolences to anyone that lost a love one 6 years ago. That pain
never goes away.
Little did I know that 2 years and 1 day later we'd welcome the twins
into the family. Twins don't run on either side, so that was truly one
of the big surprises I expect to have in this lifetime. But it's all
good - it's just hard to believe it's been 4 years. They are little
people now. Most interesting to me is the dynamics between all the
siblings. To see how they interact and are actually becoming friends is
cool to see.
Tonight also starts the Rosh Hashanah holiday. So we close
the book on Year 5767 and look to open the book on 5768. I usually take
some time over the next 10 days or so to reflect on the last 12 months,
and get my arms around what may happen in the next 12. I used to be
much more of a planner, but now I kind of let things flow. I still set
goals, but I'm not as focused on them. They are more like mile markers
to me. Things I want to do, as opposed to things that I have to do. I
guess that's good, in that I don't need to continue achieving things on
a list in order to feel fulfilled.
So L'Shana Tova to any of your celebrating tonight. I wish you
happiness, good health, prosperity, and fulfillment in this New Year.
Follow your dreams, listen to your gut, and try to laugh a bit every
day. That's about the best we can do.
Have a
great day. I'll be back on Monday with a big announcement that I expect
will keep me pretty busy over the next year.
Technorati: Information
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Top Security News
ArcSight
hopes to reach the starting line
So what? -
I remember the day META Group went public. Our CEO, Dale Kutnick, said
something that stays with me to this day. He basically told us that the
IPO is a great accomplishment, but it's only the beginning of the road
to building a long term, sustainable business. Now ArcSight has filed their S-1 with the SEC
to do an IPO. I love S-1's because there is nothing to hide. No more
hiding behind "we are a private company and don't divulge X, Y or Z."
So what do we find in ArcSight's S-1? They did about
$70 million on the top line. Almost 40% of it was services, which
indicates the category is still very integration centric. Product
license growth was significant between 2006 and 2007. ArcSight's 10 top
customers were about 31% of revenues. That's an average of $2.3 MILLION
for the top 10 customers! Those are big deals. Deals that size are hard
to sustain over time. It's also good to be ArcSight CEO Robert Shaw,
who owns 10% of the company. But to his credit - he's making
concessions now that the company is going to public. Now he has to pay
his own yacht and country club fees. My heart goes out to you man.
Link to this
Which
one is Dopey? Sleepy? Grumpy?
So what? -
CRN has an interesting bake-off between 3
security suites. So how did McAfee do against Symantec and
Trend? Well, they actually compared Kaspersky, Grisoft, and Panda. 3 of
the AV dwarfs. Of course, these dwarfs are bigger than 95% of the
vendors in other security categories, but I digress. The one thing I
come away with is that all the products
are decent, thus I'm going to state the obvious. AV (and other malware
defense) suites are true commodities. All stop viruses and other
malware attacks. The vendors
will try to differentiate based on this widget or that, but in reality
these suites are pretty much the same. So it gets down to price. Shop
hard and buy based on price. Yes, you want to use a different engine on
the desktop than on the perimeter gateway. But there isn't a lot of
value add and in a lot of cases, there is value-subtract. If the
desktop suite breaks stuff (like the firewall just turning off
applications and the like), then it is subtracting value. By the way,
CRN likes Panda the best - but all of the solutions from the Snow
White triad and the dwarfs are good enough. And yes, good enough is
good enough.
Link to this
CIO Security Survey - same old, same
old
So what? -
Yes, security is an industry. It's increasing being baked into the
infrastructure. Not well enough or fast enough, to be clear, but it's
happening. The 5th CIO "Global State of Information
Security" confirms what most of us already know. Here is a
list of the "conventional wisdom." We don't
get enough money, our trading partners suck, we know we are exposed,
and that banks tend to be out ahead of the adoption curve. Yep, pretty
predictable. The thing that surprised me was that there is no
difference in security spending between small and large companies. They
spend the same percentage. Hmmm. That's counter intuitive, but shows
why mid-sized companies continue to be behind the 8-ball. A big company
spends more money, that's obvious. But given the attack surface does
not scale up linearly with the size of company (a large company with
100,000 employees probably doesn't have 100 times the number of web
sites with sensitive information as a company with 1000 employees),
you'd think mid-sized
companies would need to spend more on a relative basis to be secure.
Maybe that's why those folks are the path of least resistance.
Link to this
The Laundry List
- Someone needs to make this into an mass email joke. Farnum should have put more spaces in to get the answer below the fold, but this is great. - Farnum's ComputerWorld blog
- RSA will build security stuff for VMWare? Really? Them and everyone else. - Reuters coverage
- Add McAfee to the list of those jumping on the virtualized bandwagon. This is great - their AV stuff actually works on a virtualized OS. Talk about a Barney release. - McAfee release
- 10 seconds. Someone else in the UK is a cybercrime victim every 10 seconds. The problem will get worse before it gets better. - AFP article
- This month's column on SearchSecurityChannel is about incident response and how VARs can and should make this a key part of their offering - Rothman SearchSC column
- SearchSMB piece on encryption. I rant a bit about where encryption can and should be used by mid-sized businesses - Rothman SearchSMB column
- Should PCI be overhauled? That's the topic of my tip on SearchSecurity this month. Check it out. - Rothman SearchSecurity tip
Top Blog Postings
Click
or brick - it's all about tracking the supply chain
Remember a few years ago, when click and mortar was all the craze? Some
companies get it and some don't. Like when I can't return something I
bought at HomeDepot.com to the store. Very very annoying. And we all
pay higher prices because of "shrinkage" and other fraud that adds
friction to the commerce system. I'm pretty interested in how products
flow through the supply chain and sometimes "disappear" without a
trace. Some companies must figure it's a cost of doing business. But Ed
Dickson points to a seemingly interesting technology that addresses
whether returns are legitimate by tracking the product through it's
route from manufacturer to customer. It's a pretty long and rambling
post, but there's some good stuff in there. Especially if a lot of the
big (and high demand electronics manufacturers) started actually
tracking their products. It would clearly cut down on fraudulent
returns, and maybe help to drive down costs a bit too. We call all use
that.
http://fraudwar.blogspot.com/2007/09/siras-pi-tracking-theft-to-source.html
Link
to this
Best of breed vs. suites (again)
Marcin brings up the age old discussion about best of breed vs.
integrated suites - yet again. He puts together a few scenarios and
wonders if someone would spend an extra $37,000 to be "more secure." He
does point out that an integrated suite may result in streamlined
management, which could make the $30,000 savings a lot more than that.
But ultimately I think the entire discussion is a red herring. There is
no right or wrong answer, it's all about what you are trying to
protect. On the desktop, I think an integrated agent makes sense, since
it (allegedly) reduces complexity and eases management. Nothing wrong
with that. On the perimeter? Again, integration can make sense - but if
you have the expertise and requirement for lots of knobs and
specialized protection - then that may work for you. There are no
absolutes, only the context of solving your business problem. the
esteemed folks at Goldman just published their security survey and it
seems that best of breed is alive and well in the large enterprise, but
integration is a trend in the mid-sized segment and below. According to
them anyway, but that finding is consistent with lots of the
conversations I'm having.
http://www.tssci-security.com/archives/2007/09/10/buying-best-of-breed-versus-bundled-services/
Link
to this
I don't even know how to spell
Haiku
I'm going to end today with a little humor from your favorite (and
mine) security innovator - that's right the inimitable Chris Hoff. Last
week he published a little poem about our security history and
everything rhymed. Which is quite an accomplishment - I'm not kidding.
I remember back in the mid-90's doing a security thing for my
NetworkWorld column in the rhythm of "'Twas the night before Christmas"
and it was brutally hard. And my attempt really sucked. Although I
can't really do justice to the entire piece by excerpting it, just
check this out:
for the next frontier's here...YES! Virtualization!
Like perimeter Viagra, from our security Pfizer,
we're all solid now, all hail...Hypervisor!
Perimeter Viagra. That's awesome. I guess it would be good for
Stiennon if everyone bought six and could go all night. Thanks to Hoff
and his poison pen for allowing me to laugh a bit.
http://rationalsecurity.typepad.com/blog/2007/09/security-haikuo.html
Link
to this
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Back in 2000 when I was at CertCo our HR Director was giving away some prize for the best Haiku. One of our QA guys wrote an X-rated PKI Haiku. Gotta love us crypto guys. With lines like "Nobody buys our sh*t", I could not stop laughing for a week.
--Chris
Mike, I appreciate your efforts with this blog and as a security professional. I do want to you review a bit your facts and assumptions. Look further into the S-1 for ArcSight. Here are the actual numbers provided further down in the S-1 Maintenance and Services Revenues. Maintenance and services revenues for fiscal 2006 and 2007 are detailed in the following table:
Fiscal Year Ended April 30, Change in Change in 2006 2007 Dollars Percent (in thousands, except for percentages) Maintenance revenues $ 11,473 $ 18,762 $ 7,289 63.5 % Services revenues 5,103 7,082 1,979 38.8
Maintenance and services revenues $ 16,576 $ 25,844 $ 9,268 55.9 %
Maintenance revenues increased $7.3 million in fiscal 2007 as a result of providing support services to a larger installed base as well as the incremental maintenance revenues from increased product sales. Services revenues increased by $2.0 million in fiscal 2007 as a result of providing services to a larger installed base. As a result of the timing of revenue recognition for sales transactions that included an undelivered product element for which we did not have VSOE, there was a net deferral of $0.3 million of maintenance and services revenues in fiscal 2006 and a net recognition of $0.1 million of maintenance and services revenues in fiscal 2007. This accounted for $0.4 million of the increase in maintenance and services revenues in fiscal 2007 compared to fiscal 2006. As of April 30, 2007, deferred maintenance and services revenues included $0.5 million related to similar transactions. See the related discussion in “—Sources of Revenues, Cost of Revenues and Operating Expenses."
Sorry the table didn't post correctly - you can go directly to the S-1 here: http://www.sec.gov/Archives/edgar/data/1368582/000095013407019818/f28075orsv1.htm#121
In summary it looks to me like a good mix of product revenue, support revenue and just the right amount services - a healthy organization with a future. Now I'm not disagreeing that there are other concerns in the S-1. Revenue recognition causes huge gaps in quarterly and yearly returns deferring revenue until later quarters/years. 16+ Million is identified, which is not unusual in software companies but it should be managed more aggressively.
Overall ArcSight is the leader in their market and I can't think of a stronger security IPO play in the short term - whether they'll actually IPO and stay independent or get purchased in the short term is the real question.
Sorry for the ugly posting that's what you get with a text browser post.