Subject: RE: 10 years and no ubiquitous security

From: Michael Choung Shieh <[email-masked]>
Date: Mon, 18 Mar 2002 19:56:57 -0800

FYI.  Dedicated VPN HW Hits $1.3 Billion as shown at
http://www.infonetics.com/resources/quarterly_worldwide_market_share_forecas
ts_4q01.htm  It has a sizeable installation out there, though it does have
some large deployment issues.

Michael Shieh

-----Original Message-----
From: Alex Alten [mailto:[email-masked]]
Sent: Monday, March 18, 2002 5:26 PM
To: Steven M. Bellovin; William Allen Simpson
Cc: [email-masked]; [email-masked]
Subject: Re: 10 years and no ubiquitous security

[... skip...]

 It seems to have decided, IPsec has settled into a fairly modest
VPN market niche ($200M/yr revenues or so?). It is not turned on by
(or not available on) at least 99% of the Internet hosts.

[... skip....]

- Alex

--

Alex Alten
[email-masked]

---

From: Alex Alten <[email-masked]>
Date: Mon, 18 Mar 2002 20:57:23 -0800

Sigh.  I knew I shouldn't have put a dollar figure in my response.

Michael you have to take those reports with a grain of salt, dollar
amounts tend to be meaningless.  At the risk of getting nailed here's
how I did my math.  Red Creek last year shipped about 1% of the hw
IPsec VPN boxes worldwide.  They were bought for about $10M (if I
remember correctly).  Thus implicitly valuing all the firms, divisions
of firms, etc., at about $1B.  Generally speaking in a growth industry
you pay about 5x revenues.  So this means the industry last year
probably had about $200M in revenues. I may be off a bit, maybe its
$300M, but that's about how much money is being paid by real customers
per year.  It's not a huge market, at least not based on my back-of-
the-envelope calculations.  If I'm wrong then I'm sure one of your
marketing guys can correct me with more accurate numbers.

- Alex

--

Alex Alten
[email-masked]