Check Point Software  needs this quarter to be its biggest in years for revenue if it hopes to match last year's revenue figure of $528 million. The company also is in the midst of a slide in its stock prices from a high of about $50 per share to a low of $10.37. This, despite claims by potential customers of the firewall/VPN vendor that security has higher priority now more than ever. The company also reported results of a test it commissioned that found that its gear - surprise - outperformed similarly priced gear from competitors Cisco and NetScreen Technologies. Check Point Chairman and CEO Gil Shwed recently discussed these developments and others with Network World Senior Editor Tim Greene.

Our readers say that even though their budgets are cut, security is a heightened priority. What does that do to your revenue?

Many people renew licenses, and that is a very good source of revenue. Many people extend existing infrastructure and buy a little bit more. That's another part. We do see a number of large projects. Actually, the surprising part is we see today more large projects than we saw before. The negative news is that people are very, very cautious on spending. In the past, these large projects were closing in three to six months. Today, it can be six to 18 months to close because they are very, very cautious about their spending.

Are these large projects by virtue of shifts from another vendor or technology, or are these new companies?

It's existing companies, a company that has 100 firewalls built over five years by 10 different departments, and they now want to buy infrastructure to manage it consistently to really streamline the security policy. Most of it is reorganizing and buying management infrastructure. The other projects are replacement of frame relay links about usage of broadband to [access] the Internet instead of legacy networks. There we see projects that range from connecting five sites to connecting 18,000 offices in an extranet.

What are your thoughts on Check Point and appliances? Will there be Check Point-manufactured appliances?

I think that we dominate the appliance arena with partnerships. Nokia is by far our most successful partner - our premiere partner. Appliances gained reputation over the past few years of devices that are easy to maintain and which provide high performance. Appliances moved from being 10% of the market to around 50% of the market. Appliances are pieces of hardware running software. An open server running software is also doing the same kind of job and in most cases they use similar architectures.