Articles
The following article is from the April 26 1999 issue of Network World:
Cash cow
Check Point Software reaps the most profits from revenue.
What's the key to running a profitable business?
We asked Check Point Software, which last year earned a whopping 49% return on revenue, landing it atop the list of the most profitable Network World 200 companies.
Asheem Chandna, vice president of marketing and business development at Check Point, which sells firewall and other enterprise network security products, chalks up the company's success to three things:
- A leveraged sales model. Check Point sells through a large base of partners, including OEMs, distributors and managed service providers. That gives the company broad reach and the ability to scale quickly without the associated cost of maintaining a direct sales force.
- Innovative technology. "We came late to the firewall market in 1993," Chandna says. "There were already several other vendors, but we came out with innovative technology and basically provided the best price/performance. It is key to have innovative technology and market-leading products."
- A fast growing market segment. "We are fortunate to be in a high-growth market," Chandna says. "Security has become a must-have vs. a nice-to-have technology."
Asked if profitability is a corporate goal, Chandna says Check Point focuses on growing revenue and delivering high-quality products. Profitability is a byproduct.
Some of the profits go back into the product. Chandna says the company's research and development group is the fastest growing business unit. Last year, Check Point spent 7% on R&D. That figure is respectable, but not enough for Check Point to make the NW200 list of companies spending the most on R&D.
"Even as profitable as we are, we still spend money carefully," Chandna says.