Check Point-Sourcefire deal falls through – what now for Check Point?

The deal for VPN vendor Check Point to buy intrusion detection maker Sourcefire has fallen through, setting back Check Point’s plans to boost its overall network security gear.

Check Point will now have to scout around for an alternative or develop more sophisticated intrusion detection system (IDS) of its own. Sourcefire is the keeper of Snort, the well-respected open source intrusion detection software, and had managed to hold its own against larger, better funded competitors. It will be difficult for Check Point to find another IDS company as good as Sourcefire for sale.

Check Point has been working for two years to integrate new product lines, including its own IDS, into a single policy management platform and to have all its devices contribute data to its event-correlation software. The value of adding sophisticated Snort-based technology from Sourcefire could have advanced the stature of the company’s overall security system significantly.

While Check Point has plenty of money to buy up another company – it was willing to pay $225 million for Sourcefire – finding one will be tough in two ways. First, there just aren’t that many independent intrusion detection vendors out there that are the caliber of Sourcefire, and, apparently U.S. firms are off-limits.

The deal with Check Point fell through, apparently, because of objections by the U.S. government, which began investigating the potential merger earlier this month. It was concerned that Sourcefire, which is used to protect computer assets of the Department of Defense and the National Security Agency, would be owned by a foreign company. Check Point is an Israeli-owned company, and concerns were raised that the deal could potentially give a foreign power a way to compromise secret data.

The merits of the argument are debatable, but the bottom line for Check Point is that apparently the government is prepared to give it a hard time over such deals and it may put the company at a disadvantage because it can’t access the technology it sees as important to growth.