The Start Of Market Consolidation?

Lockdown Networks has closed its doors and is looking for someone to buy it's IP. Is this just the beginning of the NAC market consolidation, or an isolated event? Let's face it. No one is making money hand over fist in NAC. I haven't seen a clear market leader emerge in either technology or market presence.

Year over year, analysts and journalists, myself included, have been predicting that "This is the year of NAC" and "There are too many NAC vendors and the market is going to shrink." Neither prediction has really come true.

There are, perhaps, many reasons why the first prediction hasn't come to fruition. NAC technology is too immature, too complicated, too costly, doesn't solve the right problem, doesn't solve any problem, too brittle, doesn't have enough integration points, too few standards, no clear leader, no established best practices, too many exceptions, not effective enough, requires yet another agent, does use an agent, requires costly upgrades to existing infrastructure, requires new support products and processes, and so on.

I've been looking at a lot of NAC products lately and the products are in varying degrees of maturity. When pressed about this or that missing feature, vendors invariably say the feature is either in the pipeline, doublespeak for "We had to add it to win a customer" or vendors say they will add it when there is customer demand. Usually the latter statement is said in the context of a sigh and further explanation that while the feature may be useful, their developers have to focus on features based on demand, meaning paying customers or prospects.

Given the competitiveness of the high-tech industry and the uncertainty in a new technology market, startups need to be brutal in prioritizing projects. I understand the vendor's point, but it's a tough way to make a product.We can look back to the precursors of NAC with products from vendors like Perfigo, Zone Labs, and Sygate. The crazy idea to control access to a network as hosts attached was pretty much unheard of. Well, OK. I can track this idea back to the late '90s and Directory Enabled Networking that was all the rage. But NAC took hold and vendors started coming out of the woodwork. New vendors popped up. Existing vendors changed gears. At the same time, well-established companies took notice of the emerging NAC market and the precursors to NAC were snapped up. Cisco bought Perfigo in 2004. Check Point bought Zone Labs in 2004. Symantec bought Sygate in 2005. Sophos bought Endforce in 2007.

That left a whole slew of vendors to fight for funding and customers. I don't know what happened to Lockdown, but it looks as though it ran out of cash and either couldn't, or didn't want, to secure more funding. Of all the people in IT vendor community, I feel for the small startups struggling to win business day in, day out. That kind of environment has to take its toll after awhile.

The second prediction, that there was going to be consolidation, hasn't happened just yet. Caymas closed up shop middle of 2007. Something is going on over at Vernier Networks, but they aren't saying what. And now Lockdown closed its doors. Hardly the much-anticipated winnowing of the wheat from the chaff. With over 30 vendors in the NAC space, company closings and acquisitions are bound to thin the field further.

Where does that leave you, dear reader? One of the factors startups have to contend with is the perception that they could disappear one day, leaving customers in the lurch. Lockdown Network's legacy may be a cautionary tale that grizzled CIOs tell wet-behind-the-ear admins around the virtual campfire. "Beware the VC funded start-up," the CIO grumbles, "they could disappear tomorrow." That's a very real risk and one of the reasons why funding announcements and customer wins are important to track. If you're looking at NAC vendors that are still surviving in whole or in part on funding, you have to make doubly sure to perform due diligence on the company's financials before and after the sale.

Startups usually have the most interesting technology and are often willing to make changes to win your business, but if they tank, you could be left holding the bag.1011