Check Point

Check Point Software Technologies Ltd.

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Check Point headquarters, Tel Aviv, Israel
Type	Public
Traded as	NASDAQ: CHKP NASDAQ-100 Component
Industry	Security software Computer hardware
Founded	Ramat Gan, Israel (1993 (1993))
Founders	Gil Shwed Marius Nacht Shlomo Kramer
Headquarters	Tel Aviv, Israel and San Carlos, California
Key people	Gil Shwed, (Founder & CEO)
Products	FireWall-1, VPN-1, UTM-1, Check Point Integrity, Intrusion prevention systems, Endpoint, security, Security appliances, Web Application Security
Revenue	US$1.629 billion (2015)
Net income	US$685 million (2015)
Number of employees	3,500 (2016)[1]
Subsidiaries	ZoneAlarm, SofaWare, Easy2comply
Website	www.checkpoint.com

Check Point Software Technologies Ltd. is an Israeli multinational provider of software and combined hardware and software products for IT security, including network security, endpoint security, mobile security, data security and security management.

As of 2016 the company has approximately 4,000 employees worldwide.^[2] Headquartered in Tel Aviv, Israel, the company has development centers in Israel, California (ZoneAlarm), Sweden (Former Protect Data development centre), and Belarus. The company has main offices in the United States, in San Carlos, California, in Dallas, Texas, and in Ottawa, Ontario (Canada).

History

Check Point was established in Ramat-Gan, Israel in 1993, by Gil Shwed (CEO as of 2016), Marius Nacht (Chairman as of 2016) and Shlomo Kramer (who left Check Point in 2003).^[3] Shwed had the initial idea for the company’s core technology known as stateful inspection, which became the foundation for the company's first product, FireWall-1; soon afterwards they also developed one of the world’s first VPN products, VPN-1.^[4] Shwed developed the idea while serving in the Unit 8200 of the Israel Defense Forces, where he worked on securing classified networks.^[5][6]

Initial funding of US$400,000 was provided by venture capital fund BRM Group.^[7]

In 1994 Check Point signed an OEM agreement with Sun Microsystems,^[4] followed by a distribution agreement with HP in 1995.^[8] The same year, the U.S. head office was established in Redwood City, California.

By February 1996 the company was named worldwide firewall market leader by IDC, with a market share of 40 percent.^[9] In June 1996 Check Point raised $67 million from its initial public offering on NASDAQ.^[10]

In 1998 Check Point established a partnership with Nokia, which bundled Check Point's Software with Nokia's computer Network Security Appliances.^[11]

In 2003, a class action lawsuit was filed against Check Point over violation of the Securities Exchange Act by failing to disclose major financial information.^[12]

During the first decade of the 21st century Check Point started acquiring other IT security companies, including Nokia's network security business unit in 2009.^[13]

Over the years many employees who worked at Check Point have left to start their own software companies. These include Shlomo Kremer, who started Imperva; Nir Zuk, who founded Palo Alto Networks; Ruvi Kitov and Reuven Harrison of Tufin; and Yonadav Leitersdorf, who founded indeni.

Products

Check Point offers the following primary products:

• Network Security
• Software Defined Protection
• Public and Private Cloud Security
• Data Security
• ThreatCloud
• ThreatCloud IntelliStore
• Virtual Systems
• Endpoint Security
• Mobile Security
• Security Management
• Document Security (Capsule Docs product line)^[14]
• Zero-day Protection (SandBlast appliance product line)^[15]
• Mobile Security (Mobile Threat Prevention product line)^[16]

Acquisitions

Check Point offices, Tel Aviv

• Zone Labs, makers of the ZoneAlarm personal firewall software, in 2003, for $205 million in cash and shares.^[17]
• Protect Data, the holding company for PointSec Mobile Technologies, in a cash deal valued at $586m in late 2006.^[18] Prior to their acquisition by Check Point, Protect Data acquired Reflex Software.^[19]
• NFR security, an intrusion prevention system developer, for $20 million in late 2006, following its failed plan to acquire the larger IPS vendor Sourcefire.^[20]
• Nokia Security Appliances division was acquired in April 2009.^[13]
• Liquid Machines, a data security startup company based in Boston, was acquired in June 2010.^[21]
• Dynasec, a provider of enterprise governance, risk management, and compliance products, was acquired in November 2011. Dynasec offers a Web-based enterprise application, branded as Easy2comply, for Sarbanes-Oxley compliance, Basel II compliance, operational risk management, information security management, HIPAA compliance, and internal audit management.^[22]
• Hyperwise, an early-stage startup, focused on CPU Level Threat Prevention was acquired Feb 2015.^[23]
• Lacoon Mobile Security was acquired in April 2015.^[24]

In 2005, Check Point tried to acquire intrusion prevention system developers Sourcefire for $225 million,^[25] but later withdrew its offer after it became clear US authorities (specifically, the Committee on Foreign Investment in the United States ) would try to block the acquisition.^[26]

SofaWare legal battle

SofaWare Technologies was founded in 1999, as a cooperation between Check Point and SofaWare's founders, Adi Ruppin and Etay Bogner, with the purpose of extending Check Point from the enterprise market to the small business, consumer and branch office market. SofaWare's co-founder Adi Ruppin said that his company wanted to make the technology simple to use and affordable, and to lift the burden of security management from end users while adding some features.^[27] In 2001 SofaWare began selling firewall appliances under the SofaWare S-Box brand;^[28] in 2002 the company started selling the Safe@Office and Safe@Home line of security appliances, under the Check Point brand.^[27] By the fourth quarter of 2002 sales of SofaWare's Safe@Office firewall/VPN appliances had increased greatly, and SofaWare held the #1 revenue position in the worldwide firewall/VPN sub-$490 appliance market, with a 38% revenue market share.^[29]

Relations between Check Point and the SofaWare founders went sour after the company acquisition in 2002. In 2004 Etay Bogner, co-founder of SofaWare, sought court approval to file a shareholder derivative suit, claiming Check Point was not transferring funds to SofaWare as required for its use of SofaWare's products and technology. His derivative suit was ultimately successful, and Check Point was ordered to pay SofaWare 13 million shekels for breach of contract. In 2006 the Tel Aviv District Court Judge ruled that Bogner SofaWare could sue Check Point by proxy for $5.1 million in alleged damage to SofaWare.^[30] Bogner claimed that Check Point, which owned 60% of Sofaware, had behaved belligerently, and withheld monies due for use of SofaWare technology and products^[30] Check Point appealed the ruling, but lost.^[31]

In 2009 the Israeli Supreme Court ruled that a group of founders of SofaWare, which includes Bogner, had veto power over any decision of SofaWare. The court ruled that the three founders could exercise their veto power only as a group and by majority rule.

In 2011 Check Point settled all litigation relating to SofaWare. As part of the settlement it acquired the SofaWare shares held by Bogner and Ruppin, and began a process of acquiring the remaining shares, resulting in SofaWare becoming a wholly owned subsidiary.^[32]

See also

• Check Point GO
• Check Point VPN-1
• Economy of Israel
• Silicon Wadi
• ZoneAlarm

References

External links

• Corporate website

• • Business data for Check Point: Google Finance
  • Yahoo! Finance
  • Reuters
  • SEC filings