Many valuable business models depend vitally on secure networking. These business models include:

* Delivery of content (music, movies, TV, radio and interactive games);

* IP Network-enabled virtual enterprises, including work-at-home;

* E-commerce (retail, financial services, travel services and many transaction-oriented activities); and

* Messaging services such as e-mail and instant messaging.

Each model imposes its own unique security and performance requirements that influence economic success. Content delivery went nowhere until the RIAA (Recording Industry Association of America) was satisfied that the technology existed for secure content distribution. Network-enabled enterprise models are gaining favor now that IP traffic can be handled securely and privately in conformance with federal laws such as Gramm-Leach-Bliley and HIPPA.

Network security challenges include going beyond perimeter-based security, bad behavior by authorized applications, SPAM, patching, content filtering, vulnerability analysis and application traffic management.

Much existing security is centered on the enterprise firewall with the implicit understanding that those outside the perimeter (i.e., on the Internet) are bad while everyone on the inside is good. This model isn't sustainable even conceptually given the rapid virtualization of enterprise work and life styles. Security must support mobile or virtual employees and business partners as well as broad new device types such as SIP phones, Wi-Fi devices and 3G wireless systems.

Network-based security must also be personalized according to individual, application and role. For example, should the company treasurer have the same access to the funds payment system when using his PDA as when he is sitting at his desk?

Bad behavior by authorized applications is another challenge. Many new attacks use authorized ports as attack vehicles. E-mail is often used to penetrate network security defenses.

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Keeping network security current is also a challenge. Mobile, distributed and virtual work styles aggravate this job because IT staff has less control over every workstation. Employees returning from a business trip, for example, may have become infected with a worm or Trojan while working at an airport hotspot. Technology for frequent, proactive penetration testing and vulnerability analysis can add an additional security layer.

Networking vendors are responding to these security challenges in three broad ways:

* Appliance-based software;

* Development of MSSPs (managed security service providers); and

* Integration of security services into network hardware, especially routers and load balancers.

Network security appliances provide an attractive balance between time to market for new security features and the high-performance of hardware-based systems. Recent appliance-based solutions offer application-level security, strong authentication, anti-SPAM, penetration testing, network admission control, wireless LAN authentication and Web access management.

By continuously analyzing security events across all subscribing customer networks, MSSPs can provide a higher level of network protection and support more specialized expertise than can even the largest single network operator. Open communication about security events across all the MSSP customers' networks also provides an information advantage because individual enterprises are loath to disclose they have been hacked because of resulting negative publicity.

Router vendors and vendors of data center products such as caching systems and server load balancers are adding network security features to their core products. This can be an attractive approach to network security because the network architecture is simplified and the approach is consistent with the longstanding trend in the electronics industry to leverage silicon to do more in the same box.

There is a large, growing opportunity to provide network security products and services. This opportunity is driven by the need to add security to the inherently insecure Internet, benefiting network-centric business models focused on content delivery, IP network-enabled virtual enterprise, e-commerce and messaging services.

Successful vendors of such products and services must be perceived as--and actually be--credible and trustworthy; provide customers with visibility into the security process; and provide broad, technically deep sales expertise and professional, educational services.

Michael Kennedy is co-founder and managing partner of Network Strategy Partners, LLC (NSP)--management consultants to the networking industry