Corero Network Security PLC (LON:CNS), a specialist in cyber threat blocking, was one of the best-performing shares of the first quarter in London.
That performance reflects a growing realisation of the threat posed by cyber-crime and the commercial opportunities the threat presents for a company such as Corero that specialises in combating it.
A string of contract awards in the first quarter underlined Corero's market leadership in the field of preventing distributed denial of service (DDoS) attacks, where one or more malevolent agencies bombard a company's web site or network with requests with the intention of causing a kind of cyber gridlock.
Such attacks can be highly damaging financially, not to mention reputation-wise, so companies are keen to be bang up to date on providing the latest protection.
The hacking of telecoms group Talktalk Telecom Group PLC (LON:TALK) in 2015 was but one high profile case of cyber-crime, although in this case it was a hacking attack (the computer equivalent of breaking & entering) rather than a DDoS attack, and it is highly probable that there have been many, many more attacks that the public did not get to hear about, simply because companies acquiesced to the attacker's demands for money.
The latest contract award won by Corero is the first significant order for the company's SmartWall Threat Defense System that it has received from a European hosting provider.
The order, worth more than $200,000, follows a successful proof of concept trial during which Corero was able to demonstrate the effectiveness of automatic, in-line, real-time DDoS protection.
That order followed two landmark cyber contracts struck with tier-one internet service providers (ISPs). The deals, with a combined value of over $1mln, were for the provision of SmartWall technology to a tier one ISP in Europe while the other was with a US web hosting giant.
Corero's chief executive, Ashley Stephenson, sees hundreds of further opportunities for new business.
Meanwhile, the company continues to expand its offering, with the launch recently of a beta version of its latest software monitoring solution.
Cloud-based Corero SmartWall Network Threat Defense - Virtual Edition (vNTD Monitor) can be deployed against any server or network and monitors DDoS events.
The idea is the new product will lead to increased demand for the company's flagship SmartWall Threat Defense System mitigation tool.
Speaking to Proactive Investors on January 6, chief executive Ashley Stephenson said he was very optimistic about the outlook for 2016 based on the two tier one ISP wins.
"It will create somewhat of a halo around our technology allowing others to follow these leaders in their decisions about purchases (of cyber protection", he suggested, adding he believed the two wins were indicative of hundreds of further contracts across Europe alone.
"I don't think any business is immune from the threat of cyber-attacks these days so we expect a growing opportunity for the security companies in general.."
"Cyber security respects no national boundaries so we see just as sophisticated attacks in Europe as we do in the US," he added.
Tier-one companies are generally the largest internet providers in a particular region and as such there are only a few of them around the globe so these wins represent a real step change for Corero and a huge validation for the technology.
The DDoS market is, according to Stephenson, is “hot and only getting hotter”.
“It is a durable space for the next five years.
“It is busy and people are coming into the space, but the area we are interested in, DDoS, is still relatively sparsely populated.
“There are only a few companies like us that can do what we can do. It is a limited competitive field, so we don’t feel like there is a major threat,” he said.
House broker finnCap said of the latest $200,000 contract win: “Corero continues to demonstrate the success of its SmartWall Threat Defense System with a further contract announcement, this time with a top regional European hosting provider. The $200k order follows a successful Proof of Concept trial, and comprises multiple SmartWall TDS products as well as three years ongoing SecureWatch services to monitor protection of the client infrastructure as well as offering DDoS protection for its customer base,” said finnCap's Andrew Darley.
“After a series of very positive announcements showing the development of a considerable customer base, we look forward to prelims on Thursday 21 April,” Darley said.