MATRIX UAB - PHION network management and security products, VPN, firewalls

PHION company summary - fully managed, fast, secure, traffic intelligence network architecture

phion Information Technologies - Company Summary

Phion is one of the leading European providers of solutions to protect company communications. With the netfence product portfolio Phion offers solutions for the most demanding standards in terms of availability, security and management. phion netfence consistently addresses all security-related aspects: From perimeter defence to the safe and highly available connections to branch offices, right up to blocking dangerous contents and protecting internal networks. All Phion products have core management and are distinguished by their remarkable TCO.
Phion is listed at the Vienna stock exchange (symbol: PHIO) and is based in Innsbruck, Austria. Phion's customers include well-known, internationally operating companies from all sectors of industry.

Phion - An Introduction
phion Information Technologies is a leading European provider of intelligent security and communication
infrastructures. phion’s holistic communication protection architecture allows its customers to implement secure yet highly available communications throughout the extended enterprise.

The Company’s flagship suite of products,netfence, provides a convergence solution that lets network administrators implement and manage both state-of-the-art security functionality and traffic-analysis, -shaping, and -routing capabilities in a uniquely integrated manner. This makes configuring, analyzing and managing both security and availability of powerful, multi-access corporate networks carrying business critical applications much easier. The powerful netfence offering is a comprehensive suite of security and management systems consisting of :

Network security technologies: Firewall /
VPN / IPS / URL Filtering / SPAM / DNS /
Compression / Antivirus

Endpoint security technologies: Personal
Firewall / VPN Client

Traffic Intelligence

Highly scalable management technologies:
comprehensive centralized configuration, monitoring and lifecycle management, and real time-management tools.

In the market, European security players have significant technical success with a strong presence in EMEA and an increasing market share in the rest of the world. phion’s technology leadership is demonstrated by its overall strength in the DACH (German) speaking countries. For example, the Company holds the #1 position in the Austrian Banking industry: Some 70% of all firewall installations in this market segment are based on phion netfence. Using phion products, multinational corporations and large to medium size companies provide and centrally manage the IT business application connectivity of their offices, factories and warehouses, and, most important, of their employees around the world. Today, some 350 companies benefit from the advanced features of netfence. Customer trust is one of the many factors that have made the company a European leader in security and connectivity solutions.

phion - Business Case

Today’s enterprises are confronted with an increasing need for efficient, highly integrated security and connectivity solutions. The ever increasing need for network security is well publicized and understood as are the problems created by globalising business processes and thus IP-based communications. While the market is constantly evolving, these stumbling blocks to secure, managed, yet highly available distributed connectivity for any user at any site have remained problematic.

Getting this complex distributed structure up and running for the whole company often fails due to the extreme complexity of such a project. Such a project depends on the appropriate cooperation and integration of network components such as switches / routers and firewalls / VPNs / virus scanners, etc. Implementation, management and maintenance of these separate products within complex networks require time and personnel that is often impossible to justify from a commercial perspective. phion netfence is a best of breed suite that offers an innovative solution to solve this problem. netfence addresses the three central customer requirements: Availability, Security & Management.

Critical corporate services like firewall, VPN, mail gateway or http-proxy and DNS services are networked to provide a uniform infrastructure that can be managed extremely efficiently by central management servers.

This concept enhances the efficiency of a company’s network while drastically reducing total cost of ownership (TCO). Having pioneered the concept of traffic intelligence and transformed security technologies into communication protection solutions, phion is ahead of the curve. Together with its massively scalable management architecture developed for the world’s largest firewall project at the time, phion has clear advantages over all competitors. Further, phion is well positioned with its technology and expertise to provide leadership in the evolving convergence occurring in the network systems market segment. netfence offers potential value for the corporate network of virtually every international or global company requiring a high level of secure business application availability for users at many different locations, around the clock. Please see “Market Opportunity” and www.phion.com section for more discussions.

phion in Gartner’s Magic Quadrant
Network Firewall Market Continues to Evolve - Network firewalls are often the first line of defense and primary implementers of a positive security model policy. Trends in both threats and enterprise
technology are forcing firewalls to evolve. As threats have become more complex and moved higher in the network stack, firewalls have had to have greater integration and increasingly rich management and configuration solutions. Trends such as server consolidation have also driven firewalls to support virtual firewall capabilities. Commoditization has not occurred with enterprise firewalls, because selections in this market continue to favor best-of-breed security and management features. phion has a good future road map and is a company to watch. “Enterprise Firewall Magic Quadrant”, 1H06, 5 June 006, Greg Young and John Pescatore

phion - Company History
phion Information Technologies GmbH was founded in March 2000 by Dr. Peter Marte, Dr. Thomas Pellizzari, Dr. Wieland Alge and Dr. Klaus Gheri. The Company is headquartered in Innsbruck, Austria.

The power of the netfence architecture is rooted in the challenges phion faced back in the year 2000 when the Company won one of the most demanding connectivity & security projects: Deploying 650 firewalls in the branch offices of some 60 commercial banks in Austria, to be centrally managed by an IT service centre staff of just two people. A novel architecture was required to meet the strong manageability and powerful connectivity features of such a project.

Therefore phion designed phionOS, a custom tailored Linux kernel enhanced with its own sophisticated infrastructure, management, and control layer before even beginning to develop classic gateway software components. The resulting advanced netfence architecture is a product of some 50 – 60 person-years of R&D effort and the Company is currently considering several patent applications. The concept combines both the flexibility of software based gateways with the compactness of hardware products into a so-called software appliance.
Commonly recognized as the leading European firewall vendor phion is equipped both with an enormously strong market position in its home markets and with proven cutting edge technology. phion has also a long history of successful integration projects with technology partners to incorporate complementary technologies.

phion Products
phion has developed the concept of Software Appliance to form the basis for netfence and Management Centres. The core of this concept is the phion Operating System (phionOS) developed from scratch in the form of a hardened and optimized Linux operating system. Installation of phion netfence including phionOS on a normal server with Intel hardware takes less than five minutes and personnel can also carry out installation without specialist training.

Since 2004 phion partners with appliance vendors and all products are also available as preinstalled appliances. With netfence sintegra, netfence sectorwall and netfence contegrity, phion also offers since 2005 dedicated security appliances delivering comprehensive security and availability for branch offices, protection against internal threats, and content security with anti-virus, anti-spam and URL filtering at the perimeter.

netfence gateways
The perimeter, the boundary between the company network and the outside world, is still the first and most important line of defense. The performance of security solutions on the Internet and VPN gateways decides whether external attacks mounted by hackers and malicious codes are successful in penetrating the network – or whether they are blocked at the outset.
Uncompromising perimeter security therefore forms the basis for comprehensive protection of the critical resources and processes of a company. Netfence gateways combine all security functions available and are therefore well-suited to work as a UTM product as well as being a specialized part of a enterprise deployment. Netfence Gateways are available as software and appliance solutions.

netfence contegrity
The netfence contegrity solutions provide mail security and anti-virus, SPAM Filter, Web Protection and URL Filters. Traditional infrastructure services, such as DNS, NTP, DHCP servers and also SSH/FTP in the case of the bigger variants, can also be used. netfence Contegrity is available as a software and appliance solution.

netfence sintegra
The netfence sintegra appliances are integrative security gateways offering remote sites in particular more security and a high level of accessibility for their digital communication pathways at significantly lower operating costs. This means that branches not having their own security personnel can be optimally integrated within the existing, group-wide security infrastructure.

netfence sectorwall
The netfence sectorwall offers the optimum solution for internal firewalling and LAN segmentation. It is intended for use in the central corporate network. With netfence sectorwall, company-wide security policies are not restricted to the perimeter and field offices, they can also be implemented in the increasingly important core area. netfence sectorwall is available as a software and appliance solution.

netfence VPN Connectors
The netfence VPN Connectors meet today’s rigorous requirements: the integrated personal firewall is easy to use and offers comprehensive
application protection features. Combining the benefits of IPsec and SSL-VPN so that NAT Traversal and HTTPS/SOCKS proxy compatibility are possible provides unrestricted connectivity. The netfence VPN connectors also guarantee secure authentication, strong encryption and implementation of central security policies.

netfence Management Centres
The netfence Management Centres permit comprehensive management of the entire security infrastructure with cost-effective deployment of resources. The netfence solutions and phionOS-based servers are administered via dedicated and centralized servers. Using the netfence Management Centres, administrators monitor the status of remote gateways, administer the netfence configurations and software, define global standards, and record information about individual or multiple gateways. Central configuration management includes VPN and firewall policies, as well parameters such as software licenses. This means that disaster recovery is possible in less than 8 minutes.

phion Market Opportunity
phion’s products easily demonstrate attractive ROIs because they enable new, or extend existing, business processes. As a result, customer’s organizations work smarter and/or faster, while reducing the total cost of ownership of classical security functions.

Delivering on the promise of the “connected company”, that lets corporate employees work smarter, not just harder. For example by taking full advantage of a company’s mission critical applications such as SAP and rolling them out far beyond the boundaries of their classical user group, to all “users” that are involved in the business processes - potentially including equipment and machinery, vehicles and the like. This extension requires reliable, ubiquitous links to the corporate network for everyone and everything participating in these business processes at any time.
However, most CIOs still balk at such projects because the lack of cooperation and integration between switches/routers on the one hand and plain security gateways like firewalls, VPNs, proxies, virus scanners, etc. on the other hand. This typically results in highly complex structures that are very hard to roll out, manage, and maintain and are therefore, not economically viable. phion has developed an innovative approach to solve these problems.

The Company addresses the requirements of security functionality, traffic intelligence, and high availability in an integrated, synergetic way. This new type of gateway enables the convergence of security, routing, and network management functions. Examples for customer problem scenarios that lend themselves as prime targets to the deployment are:
- Building e-business infrastructures
- Connecting (franchised) dealer and service locations to a manufacturer’s corporate network
- Linking mobile users, remote locations, vehicles like forklifts, trucks, cars or cargo vessels & production equipment, machines, etc. into business applications using xDSL or UMTS/ WLAN,
- Reconfiguring and/or (sub-) segmenting of large corporate networks
- Insuring 7x24 availability of business applications using redundant network links.

Target Market
On a horizontal scale, multinational corporations and large to medium size companies (100 seats
is typically a “low end” customer in terms of size) use phion products to provide and centrally manage the IT business application connectivity of their offices, factories and warehouses, and, most important, of their employees around the world. Already a leader in its home market of German speaking countries, the Company has had continued exceptional success in the international banking market. Other strong markets include Insurance, Retail, Manufacturing, Logistics, Health Care, Government, Media, Travel & Tourism, and Energy.

Customers
Some 350 (more than 100 large enterprises) companies benefit from the advanced features of netfence. Virtually each of the Company’s customers is suitable as a reference. This attests to the power and the ease of use of the software, the rapid ROI, and phion’s strong focus on sales partner qualification and customer service. Besides 90% of Austrian banks, phion’s customer include tier-1 carrier such as Telekom Austria and swisscom, public institutions and many of the European Fortune 500 such as EADS, Schenker,
HypoVereinsbank, OMV, Sandoz, Haniel, Strabag and many others.

Branch Office Box (BOB) Concept
Products supporting today’s WAN architectures can be divided into two families, the VPN gateways (security products) and the WOCs (WAN Optimization and Controlling). Modern VPN gateways like phion’s are more connectivity gateways than simple tunnel-establishing routers. Equipped with powerful firewalls and sophisticated routing and link layer surveillance it is possible to optimize the way traffic is securely sent via a variety of basic IP-transport possibilities. The logical next step in this market (already done by phion) is to include compression technologies. Gartner is predicting that the successor of the WOC will be the BOB (Branch Office Box). In phion’s opinion, the BOB will not only be the successor or the WOCs but also of the connectivity gateways. This means that the BOB opportunity is a major convergence between the application acceleration market and the security market.

“BOBs represents the integration of servers and communication optimization. They enable the server to be centralized by going beyond the WOC to provide core services like print, DNS and DHCP. Basic
enterprise content delivery network capabilities for the distribution of patches and training material will also be provided. BOBs must also participate in the end-to-end encryption process to optimize
Secure HTTP and virtual private network tunnelled traffic.” „Market Trends: Security, EMEA, 005 - 006“ (Rugero Contu, Fabrizio Biscotti, Jay Heiser, Andy Rolfe, Tom Scholtz, Khalda Parveen , February 006)

WOCs are, up to now, restricted to private networks since they have no security capabilities.
A BOB broadens the field of purpose enormously, in fact to all branch offices of the entire world.
This is by no means surprising since in the end both are committed to deliver IT-communication protection in the widest sense. And combining these technologies phion is able to deliver an extraordinary product with unique value.

Global Growth
Building corporate networks using the netfence suite of products has valuable, positive ramifications for virtually every international or global company that requires a high level of business application availability for users at many different locations around the clock. phion is ideally positioned to leverage its success in the Banking market, its technology, new products in its development pipeline and the sales partner network it is building to become a key provider for demanding medium to large international companies that have complex IT networks and that depend on more and more of their business
critical applications being available 7x24 to ever more users. IDC has predicted that the worldwide Firewall and VPN Software market will command $1.18 billion in revenues in 2007. As analyst figures for the emerging market of converged security and management solutions are not available,phion estimates that this segment will grow four to six times faster with IT spending emphasis shifting from “security hardware and software” to “configuration management, Wireless LAN, B2B e commerce” etc. phion is convinced that this market will track or exceed the growth rates of the global Firewall and VPN market. Quarterly worldwide network security appliances and software revenue was up 1% to $1 billion between Q2 2005 and Q3 2005, and is expected to increase 21% by Q3 2006, according to Infonetics Research. Annual revenue is forecast to grow to $6 billion in 2008. Further, to secure their mobile professionals, US companies will spend $15.9 billion in 2006 for security software, services and hardware, up from $13.5 billion in 2004, according to IDC.

Competitive Landscape
Over the past two years, the Company has had a high success rate in winning competitive bids based on phion’s superior technology, ease of use and suitability for rapid deployment. netfence licenses do not vary greatly in price than competing products, but rather offer substantially greater functionality and generate ROI significantly faster due to the greatly reduced TCO. The phion concept of the “software appliance” renders the argument of whether gateways should be software- or hardware-based mostly irrelevant and lets customers focus on their actual business-enabling connectivity requirements rather that being pulled into a typically marketing-driven war over the right platform. It allows phion to be an appliance as well as a software solution. The value netfence offers to customers is threefold:

Connectivity - Enabling secure multi-path access to corporate networks, just-in-time with little or no overhead to facilitate geographically expanding businesses, to enable e-business processes or to roll out existing business applications to new, larger user groups.

Availability - Significant increase of application availability and reinforcement of business continuity precautions. For example, one customer increased application availability to true 100% level, thereby
cutting carrier costs in half

Manageability - Major reduction in TCO. In larger corporate networks, phion netfence outperforms the current market standards by up to 1000%, but even smaller companies easily cut
their connectivity/security maintenance cost by some 20% or more.

If you have big project, want free of charge consulting on your network infrastructure, or are interested in Phion products, or to have more details concerning technical parameters and scalability please see the website or ask sales@matrix.lt .