Lockdown Networks, based in Seattle, posted a notice on its website this week that it is "ceasing operations effective March 18, 2008 . . . due to overall economic trends and slower than predicted adoption of NAC technology."
"The reality of the situation is NAC has been over-hyped," Mike Rothman, principal at research firm Security Incite, told SCMagazineUS.com on Thursday. The NAC market is "over-funded, and there's no way these guys are all going to make it."
Paul Roberts, a senior security analyst with The 451 Group, said Lockdown Networks had accumulated about $20 million in venture funding before closing the doors.
He said one of the big things working against NAC players is the competition startups face.
Cisco Systems is one of the primary players in this market, "and not the company you want to go against," Roberts said.
NAC, which gives enterprise IT professionals a tool to set policies that permit or deny access to network resources by endpoint devices such as personal computers, laptops and smart phones, did not catch on in the way that anti-virus and anti-spam solutions did, Roberts said.
“It's a technology that has a lot of moving parts, is complex in nature, and touches many different points of network,” Roberts said. "Sales cycles are long and companies are careful when they deploy it. That's slowed sales down.”
Roberts recently co-authored a report titled "Network Access Control: 2008 is a do-or-die year,” which predicts NAC will finally be widely deployed this year after a half-decade of slow growth.
According to the report, “Enterprises are finally ready to deploy NAC technology or to expand the trial deployments they have.” They will, however, deploy products from “diversified NAC vendors over NAC pure plays,” the report concluded.
Consequently, the report warns of a bleak future for the plethora of NAC pure-play startups such as Lockdown Networks.
"With profitability still elusive for almost every NAC pure-play, the next 12 months will see overextended NAC startups forced to find a willing suitor or fold," Roberts said in a prepared statement in February.
Lockdown Networks' appliance-based NAC offering apparently did not appeal to enterprises, preventing the vendor from winning large accounts, Lawrence Orans, a research director at Gartner, told SCMagazineUS.com on Thursday.
Gartner, like The 451 Group, predicts 2008 to be a banner year for NAC. Orans said that Gartner research indicates the NAC market grew 100 percent in 2007 to $225 million and the research firm expects similar growth percentage in 2008.
Orans and Rothman both said Lockdown Networks was guilty of failing to execute in a tight market.
"If you don't execute flawlessly, you're dead meat," Rothman said.
Lockdown Networks' board included representatives from two venture capital firms, Black River/Cargill Ventures and Ignition Partners. The company's Lockdown Enforcer NAC appliance was a finalist in SC Magazine's 2007 Reader Trust Awards program.