Does Check Point’s Competitive Strategy Promote Customer Overspending?

By Gregg Spivack

Director of Client Services, NPI

December 19, 2013

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Since pioneering the firewall industry in 1993, Check Point Software Technologies has been a global leader in network security. Its ever-expanding portfolio of solutions span the enterprise network, and are installed in 100 percent of Fortune 500 companies.

But, can Check Point keep pace with an increasingly competitive landscape? After 20 years of being a clear market leader, how will it retain that position? The fact is that smaller, more agile vendors are entering the marketplace and accelerating the pace of innovation. Check Point has never been under more pressure to retain market leadership and prevent erosion of its financial performance – particularly important because it is publicly held.

This pressure has contributed to a pricing and licensing strategy that provides several opportunities for customer overspending. The most common areas of overspending that NPI encounters are:

  • High maintenance, support and renewal costs. Check Point is renowned for high maintenance and support costs. This creates a cascading investment for new and existing customers, where the initial purchase price may seem reasonable but the cost to keep the solution(s) up and running is not.
  • Feature-based licensing. Like many vendors, Check Point’s licensing programs have grown increasingly complex over the years, often requiring a separate license purchase for certain features. The result is that customers are finding it tougher to manage network security costs as they have less visibility into their spend.
  • Solution entrenchment. Check Point’s has a knack for entrenching themselves into the enterprise. Their solutions are deeply embedded into customers’ IT infrastructure – so much so that many companies have built their infrastructure around Check Point’s offerings. For that reason, the cost and resources required to switch to another vendor solution can be surprisingly high.
  • The price of success. The pressure to grow revenues, profits and market share is high. Check Point’s customers should be vigilant to avoid higher licensing, support and maintenance costs.
  • Check Point isn’t the only vendor to rely heavily on higher pricing and licensing complexity to assuage market pressures - it’s part of the standard vendor lifecycle. But, that doesn’t mean customers are without options to push back. With the right data and insight, companies can stop overspending on network security purchases and renewals.