Why most, if not all, “New Generation” endpoint security product are not self-sustained?

Fire Eye, Sentinel One, Crowdstrike, HackerOne, Cylance, Cyphort, Trustlook, Venafi, Clavister, Invincea,  Code42,  just to name a few,  are so called NG Cybersecurity startups.

NG comes from “New Generation” or “Next Generation”… (Yeah, just like in StarTrek. 🙂 )

 

What exactly are these “NG” products and services?

There is no single definition that fits them all. Here are the common features:

  • All of them have a cloud backend.
  • Some install an agent on each machine, some install an appliance that acts as a sniffer in the network. Some others must be installed on the default gateway where they take control of the more important entry and exit points in the network.
  • All of them analyze events in the network and send them in a form or another for analysis to the backend
  • Some filter just DNS traffic, some filter just web traffic, some filter everything
  • Combinations of above are definitely the case.
  • None of them is installing a classical AV engine to end customers (GW or End-point)
  • My guess (not able to prove it, though) is that they have a form of classical antivirus in the backend which is used as a “second” opinion scanner.

The list can be enlarged… it is by no means complete…

 

More questions instead of a Conclusion

So, why aren’t they self-sustained and keep raising money? Almost every month I hear that another NG security company has raised funds: A, B, C or they have been acquired.

I mean, if they’re doing fine, why to do they raise more funds?

 

First thing which is quite obvious: they spend more money than they make.

But, why? Are they bad at managing money?

I don’t know that… maybe they invest a lot in research… Maybe too much?

Or is this just a big hype and not enough businesses are paying for their products?

Probably the truth is somewhere in the middle.

 

Here is something interesting:

Venture capital firms invested heavily in next generation security products and services. 2015 was a record year for fundraising with an estimated $2.3 billion-$3.3 billion invested, in comparison to 2014’s fundraising total of $2.5 billion.. 2015’s fundraising total was more than 4x that of 2010.

Source: securitysales.com


© Copyright 2016 Sorin Mustaca, All rights Reserved. Written For: Sorin Mustaca on Cybersecurity


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