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    NAC Attack Fizzling for Smaller Startups

    Written by

    Ryan Naraine
    Published March 26, 2008
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      When Lockdown Networks announced March 18 that it would cease operations “due to overall economic trends and slower than predicted adoption of Network Access Control technology,” the decision prompted raised eyebrows among industry watchers worried that the shakeout is only now beginning.

      Lockdown Networks, a Seattle-based startup that banked about $15 million in venture funding, said it was “unable to raise additional sufficient venture capital to continue,” but analysts monitoring the heavily hyped NAC market say smaller startups will continue to struggle to keep pace with deep-pocketed rivals.
      “Lockdown Networks’ demise shows the continuing consolidation of the network access control market and the need for vendors to create solutions that adhere to industry standards and support heterogeneous environments,” says John Pescatore, senior vice president of research at Gartner.
      In a research note, Pescatore said Gartner has seen “strong growth in NAC deployments during the past two years,” with NAC-related revenues browing about 87 percent from 2006 to a total of $225 million in 2007. Even as the revenue projections remain rosy-close to $450 million in 2008-Gartner warns that near-term motivations for enterprises to deploy NAC have changed from preventing the spread of worms from company-owned laptops to enabling safe use of noncompany-owned PCs on the corporate network through guest networking.
      This is not good news for the smaller players. Every year, without fail, the annual RSA Security conference is filled with rosy tales of a burgeoning NAC market that’s ripe for the picking but, as the hype wears off, the NAC market is now littered with startups that struggled to get traction.

      Lockdown’s Promise and Lessons
      In Pescatore’s mind, the approaching availability of NAC capabilities in enterprise network and Windows PC/server infrastructure also requires NAC vendors to show both near-term return on investment and long-term survivability. “Solutions that can ultimately be integrated with infrastructure (for example, 802.1X-based switches) or with other core security products (such as intrusion prevention systems or anti-virus software) stand the best chance of surviving future market consolidation,” the Gartner analyst said in a research note.
      He said Lockdown’s NAC product was good for small LAN environments, but because it depended on virtual LAN enforcement mechanisms, scalability was questionable.
      “Lockdown did not build up a strong sales or distribution channel, and Gartner was unable to verify any large production deployments. We have seen a growing number of large deployments from the vendors that are succeeding in the NAC market, and we believe that vendors such as Lockdown that have exited the market represent failures of small companies to execute in a very competitive market,” Pescatore added.
      Nick Selby, an analyst who tracks the enterprise security market for The 451 Group, is also not surprised by the death of Lockdown Networks. In an interview with eWEEK, Selby said Lockdown Networks failed to find a way to translate minor successes in the college/university market.
      “University and enterprise networks are totally different things. Lockdown had been trying to translate that experience to the enterprise, but we had expressed skepticism as to whether it would be possible, in the long run, to manage the product in a way that keeps both enterprise and EDU customers happy,” Selby said.
      He predicted that Lockdown’s demise will likely be followed by others in the NAC space bent on trying to appease both sides of that fence.
      “NAC players we like are able to provide compelling and highly specific advantages-such as greatly enhanced visibility, or effective pre- and post-admission host assessment. And increasingly, successful NAC vendors will be those filling holes in Microsoft’s NAP [Network Access Protection] play by extending the functionality of that platform,” Selby said.
      Gartner’s Pescatore also pointed to integration with Microsoft’s NAP as a major requirement for all existing NAC vendors.

      Ryan Naraine
      Ryan Naraine

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