Nanalyze

11 DDoS Protection Software Companies

In a recent article we explained what a DDoS attack is and how you can possibly profit from DDoS attacks by investing in 10 publicly traded cybersecurity companies. Now we want to look more specifically at 11 providers of DDoS protection software to see which companies, both public and private, stand to benefit from the increasing awareness around DDoS protection with the latest nation-wide attack that was all over the media. The way these things usually work is that stocks will benefit from the increased awareness in the short term so speculators can take advantage of that. This also benefits long term investors who see the overall cybersecurity domain as a viable investment theme, particularly with the emergence of artificial intelligence and deep learning. The attackers will only get smarter and we’ll need to invest heavily in companies that can offer that protection. It’s kind of like your health. There’s no price you wouldn’t pay to make sure you keep your health. Here are 11 companies offering DDoS protection software.

4 Privately Held DDoS Protection Software Companies

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Founded in 2008, San Francisco startup Nexus has taken in an undisclosed amount of funding to develop a global presence that can both detect and then deter DDoS attacks as they happen. The Company noted that they are the “longest-standing Top 25 member among IT security innovators” on the Cybersecurity 500 List. (Just how fragmented does a market have to be for there to be a “top-500” list?) Nexusguard does a lot of work around monitoring and analyzing DDoS attacks and posts some interesting facts about global trends. For example, did you know that the number one target for DDoS attacks in Q1 2016 was DDoS researchers themselves? Nexusguard offers the world’s first cloud DDoS monitoring service.

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Founded in 2007, DOSarrest specializes in nothing but stopping DDoS attacks of all varieties. The Canadian startup has taken in an undisclosed amount of funding to develop DDoS protection software that has zero false positives. This means that all that traffic from your cat video that just went viral will never be confused with a malicious hacktivist attack. More than half of their customers are major Tier-1 hosting providers.

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Founded in 2009, CloudFlare was a company we talked about in our article on 9 Hot Cybersecurity Startups. The Company has taken in $182 million in funding so far to develop a web performance and cybersecurity solution that both protects your website and makes it go faster. The basic offering from CloudFlare is free (though prepare to be upsold), and 2 million web properties have already adopted it so far.

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Founded in 2013, Florida based startup Zenedge has taken in $13.7 million in funding so far to develop a cloud-based DDoS prevention solution that uses artificial intelligence to better combat attacks. The Company’s patent pending proprietary machine learning algorithms inspect web traffic in real-time to identify threats dynamically and update security postures accordingly. Setup takes just minutes and you can trial their solution for free.

7 Publicly Traded DDoS Protection Software Companies

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Arbor Networks was acquired last year by a publicly traded cybersecurity firm called NetScout (NASDAQ:NTCT) which we noted before as one of the top-10 cybersecurity stocks to invest in. Cisco and Arbor Networks have partnered to offer DDoS solutions which is a powerful move since Cisco is a dominant provider of the routers and switches that act as the backbone of the Internet. Arbor Networks cited one of the reasons for establishing the partnership was that the size of DDoS attacks has grown +4,900% in the past 10 years and closer collaboration is needed to stop the attacks more effectively. The below diagram about the relationship of these two companies presents some interesting facts about DDoS attacks and the Arbor Networks solution:

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Source: ZDNet

Arbor Networks has over 1,200 clients around the world including 90% of Tier 1 internet service providers (ISPs) globally. They claim to have visibility into 1/3 of all internet traffic globally.

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Founded back in 1996, Seattle based F5 Networks (NASDAQ:FFIV) is a $7.8 billion company that started out by offering load balancing services and then moved on to specialize in application delivery networking (ADN) technology. F5 acquired Defense.Net, Inc. a privately-held provider of cloud-based security services for protecting data centers from distributed denial-of-service (DDoS) attacks back in 2014.

 

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Founded in 2002, Imperva Inc (NYSE:IMPV) is a $1.2 billion company that was also featured on our list of 10 publicly traded cybersecurity companies. Their cloud-based DDoS offering is called Incapsula and has been responsible for thwarting some of the biggest DDoS attacks ever recorded. The Company has over 4,800 customers that consume their broad portfolio of cybersecurity services. IMPV shares have been on a roller coaster ride lately with rumors that they may be getting acquired by a list of suitors that includes IBM, Cisco, and Raytheon.

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Founded in 1997, Israeli company Radware (NASDAQ:RDWR) had an IPO back in 1999 at the heyday of the stock market bubble and their returns to date of -6% are evidence of that. This $550 million company provides a broad portfolio of services to over 10,000 customers worldwide that includes services like load balancing and performance optimization in addition to DDoS attack mitigation. DDoS and website performance are closely related. When people who build websites want to test if a website can handle traffic, they do so by conducting a load test which is essentially a controlled DDoS attack. When monitoring for DDoS attacks, you need to quickly determine if the traffic spike is malicious or a legitimate case of viral traffic. RDWR is profitable, though revenue growth slipped in 2015.

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Founded in 1995, Virginia based Verisign (NASDAQ:VRSN) is an $8.7 billion company that provides a range of security services. If you’re old school, you’ll remember Verisign as being the provider of SSL certificates but they sold their entire authentication business to Symantec in 2010. VRSN’s core business is now its naming services division. There are actually 13 root nameservers in the world that are the authority for DNS (remember that term from our previous article on DDoS?) and VRSN operates two of them. Last Friday, VRSN shares popped +6.5% which could be attributed to last week’s attacks on their competitor Dyn.

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Founded in 1996, Neustar (NYSE:NSR) is a $1.4 billion company that is “the first real-time provider of cloud-based information services, enabling marketing and IT security professionals to promote and protect their businesses“. Neustar Siteprotect is their DDoS prevention software solution that caters to organizations of all sizes and all configurations. The Company is currently proposing to split themselves in two and a quick look at that proposal leads us to believe that the overall contribution of DDoS software to total revenues is minimal.

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Founded in 1998, Akamai Technologies (NASDAQ:AKAM) is a $10 billion content delivery network and cloud services provider that has 175,000 servers which handle 15-30% of the world’s web interactions every day. When you are responsible for serving up that much content, DDoS protection software just becomes a part of your solution. Akamai’s solution is called “Kona Site Defender” and it leverages the insights that Akamai has into global web traffic across their entire infrastructure.

So there you have 11 companies that provide DDoS protection software. What we can do now is to create a motif which contains the  stocks we identified that sell DDoS solutions. What we haven’t done though is to see what percentage of each stock is exposed to DDoS which we would need to do by analyzing the SEC filings. That may or may not work because many companies don’t provide that level of granularity. Here’s a motif we put together in about 5 minutes time:

nanalyze-ddos-protection-stocks-motif

While the S&P500 returned about +6% over the past year, that motif would have lost about -13% over the same time period. Make sure you sign up to Motif Investing so you can create your own motifs.

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