But, in the hyper-acquisitive network security space, the critical question is whether Secure will be a buyer of other companies or the subject of an acquisition itself, given that continuing in its present standalone status in not a long-term option.
"They have a pretty rare product portfolio," Forrester Research security analyst Ted Julian. "Somebody could get a lot in one fell swoop."
"Six months ago, I would have said they don't have a chance," added Matthew Kovar of the Yankee Group. "Now, they have a fighting chance, but now they're also a little more attractive as an acquisition."
Secure's latest offering is new firewall software, called SecureZone, that includes a new user interface for managing enterprise security policies.
"The basic thing is, you don't need a security wizard to run this product," said Chris Christiansen, an analyst with International Data Corporation. "You can get a lower-skilled person to manage it."
Instead of showing security access privileges in large tables, the new interface lets security managers group users into "regions" and assign access rights using a "flow chart" metaphor. By enabling easier management, Secure hopes its user interface will reduce a common source of security breaches--misconfigured firewalls.
SecureZone, a successor to Secure's Borderware Unix firewall, runs on its own hardened Unix operating system, and offers virtual private network (VPN) capabilities, as well as intrusion-detection alerts when hackers are attacking the firewall. Secure will continue to support existing Borderware customers, and also will continue to sell its Sidewinder firewall, as well its NT firewall, primarily to government national security agencies.
Secure grew rapidly in 1996, making three major acquisitions, but spent 1997 trying to integrate its purchases into a cohesive whole and get into the black. CEO Jeff Waxman took over last January, and eventually hit his target of making the company profitable by year's end.
Secure also offers authentication software and tokens to verify the identity of users; filtering software to block objectionable Web sites; security consulting; and SecureWire, remote access software introduced last month that allows individual departments to give outside parties access to their data without going through MIS.
Howard Smith, Secure's new executive vice president of research and development, said the company plans to create or acquire some additional security technologies, but will leave other areas to outsiders.
Network management software is one area that Secure will leave to the likes of IBM's Tivoli unit, Hewlett-Packard's OpenView, and Computer Associates management software. Other security players, however, are looking to compete against the titans moving into this area.
Among Secure's core areas, in which it is likely to create or buy technologies, are: Biometrics (fingerprints or voiceprints), which verify the identity of users, as well as enterprise security policies and reporting tools.
"We think the security space itself is so extensive that we can focus on that," Smith said.
The company will focus on integrating its existing offerings more tightly, so that they will be able to share data and directories between security applications, reducing the cost of running the security products.
Secure chief financial officer Timothy McGurran says that the company's low cash--it had just $5 million in the bank at the end of 1997--won't lead it to rule out acquisitions by issuing new stock, the most common method of doing so in the security software space.
"We'll be doing very discrete, smaller deals, mostly with stock," said McGurran, emphasizing that no new acquisitions binge--followed by integration woes--is in the offing. The company isn't likely to forge any deal that dilutes Secure's earnings, he noted, adding that it may do a secondary offering or seek some other method of raising cash.
But Steve Olsen, stock analyst at Volpe Welty Whelan, thinks Secure might be an acquisition target for a bigger firm--one without any security offerings--that wants to get into the security market.
"Network hardware companies and network management companies both want increasingly to get involved in the firewall space as an entree to the enterprise security area," said Olsen. "But it makes more sense for network management companies than for network hardware vendors."
Even so, the number of big-name firewall firms potentially for sale has dwindled with both the TIS deal and Axent's purchase last year of Raptor Systems. Check Point Software, the top-selling firewall vendor, is generally regarded as too pricey, with a stock market value of more than $1 billion.