Corero Network Security plc

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1 Corero Network Security plc The Stock Market Show 13 September 2014 Ashley Stephenson, CEO

2 Overview Corero goes to market as a First Line of Defense that stops DDoS Attacks and Cyber Threats AIM listed company (AIM: CNS) Share price 0.21 (market value 18M) Shareholders: directors 42%, BlackRock 9%, Herald 9%, 40% other institutions/individuals Key stats Revenue FY 2013 $10m (NAM 50%, Europe and ROW 50%) 70 employees Cybersecurity software company focused on DDoS and cyber threats Launched new next generation product SmartWall Threat Defense System (TDS) in H Target market: Service Providers and large enterprises Significant market opportunity Cyber security one of the fastest growing IT sectors DDoS a growing threat market will grow to over $1.5B in 2018 (66% increase) (Infonetics Research) Well positioned for growth Experienced management team 1

3 What are DDoS attacks Distributed Denial of Service (DDoS): An attack that sends unusually large number of requests to Internet facing servers in an attempt to slow down or completely stop their ability to serve legitimate clients DDoS attacks have become a widely used cyber attack weapon DDoS or DoS (denial of service) describes a wide range of cyber attacks DDoS an increasing threat Businesses of all sizes are being targeted 2x # companies experienced a DDoS attack in 2013 (from 35% in 2012 to 60% in 2013) * 87% of companies attacked multiple times * As a result of high profile attacks in the last two years, DDoS has gone from a relatively sleepy market, undergoing only vegetative growth, to being a rapidly expanding sector. Ovum Research (May-14) 55% of DDoS attacks are distractions to confuse or overload security protection equipment (such as firewalls) and IT staff, while data theft is undertaken * * Source: Neustar report (May-14) 2

4 Firewall Locked down: No Service Access Internet Unwanted Traffic Buffer Overflows Application Layer DDoS Code Injections Internal Network Brute-Force Password Specially Crafted Packets Inbound Service Requests Blocked by firewall Firewall has no inbound holes open Corero

5 Firewall Service Ports Open Unwanted Traffic Buffer Overflows In order to allow incoming Service Requests inbound holes must be opened on the Firewalls Internal Network Web TCP Port 80, 443 Services Application Layer DDoS Code Injections DNS TCP/UDP Port 53 Brute-Force Password Specially Crafted Packets All Firewalls work the exact same way! Mail TCP Port 25 FTP/SSH TCP Port 21, 22 4 All Attacks pass right through the Firewall because that is what it thinks it is supposed to do Corero

6 Corero Inspect Open Service Ports The Corero First Line of Defense is located in-front of the Firewalls and blocks DDoS attacks and cyber threats Unwanted Traffic Buffer Overflows Internal Network Web TCP Port 80, 443 Services Application Layer DDoS Code Injections DNS TCP/UDP Port 53 Brute-Force Password Specially Crafted Packets Good user traffic is allowed to pass Mail TCP Port 25 FTP/SSH TCP Port 21, 22 5 Firewalls and downstream servers are protected and never see the unwanted traffic 2013 Corero

7 Snapshot of DDoS attacks and impact Attack Bandwidth Gbps Data shown represents the top ~2% of reported attacks AUG DEC MAJOR HOSTING SITES MAR JUN 1 JUL 1 AUG 1 SEP 1 OCT 1 NOV 1 DEC 1 JAN JUNE DEC FEB 1 MAR 1 APR 1 MAY 1 JUN 1 JUL 1 MAR JUNE HONG KONG VOTING SITES 20% of data center downtime is caused by a DDoS attack 86 minutes is an average of data center downtime due to DDoS attacks $700K per incident is the average cost of a DDoS outage $8K per minute is the average cost of unplanned data center downtime 6 Source: Network Computing/Ponemon Institute Source: Digital Attack Map - DDoS attacks around the globe

8 What we do - Stop DDoS attacks & cyber threats Corero goes to market as a First Line of Defense that stops DDoS Attacks and Cyber Threats Patented DDoS defense technology Suite of security products & services Multiple routes to market - security distributor/reseller channel, (OEM and SIs) and direct Previous Generation Next Generation DDS - DDoS Defense System (mid-size Enterprise) Previous generation product 1-10 Gbps performance On premises in-line device Always-on protection appliance Expanding the Addressable Market SmartWall TDS (Service Providers and large Enterprise) Next generation product n x ~30M pps Security services platform Always-on managed service New 7

9 Corero addressable market Service Providers: Corero SmartWall, Arbor, Radware Enterprise solutions: Corero SmartWall, Arbor, Radware, F5 Peer point DDoS Mitigation SP New Existing product Mid-size enterprise New Large enterprise New New New New Secure Internet Hosting Data Centre Corero SmartWall Network Threat Defense 8

10 Market opportunity for Corero Challenge: DDoS & Cyber Threats Online Enterprises, Hosting Providers, Service Providers and their customers are increasingly being impacted by DDoS attacks and cyber threats Customers are looking to Service Providers and Hosting/Cloud providers for protection against DDoS and cyber threats Double digit growth market (Infonetics Research) DDoS mitigation (products and services) to increase 66% to over $1.5B in 2018 Strong growth in period in DDoS products for data centres (CAGR 13.2%) and mobile providers (CAGR 20.8%) Carrier transport Carrier transport DDoS product market Mobile Mobile 2013 Total $348M Data centre Government 2018 Total $563M Data centre The data centre and mobile DDoS prevention segments are projected to maintain healthy double CAGRs from 2013 to Jeff Wilson, principal analyst for security at Infonetics Research (Jun-14) Government Source: Infonetics Research 9

11 Summary High growth market opportunity Cybersecurity one of the fastest growing IT sectors Impacts all businesses and governments DDoS a growing threat market to increase 66% to over $1.5B in 2018 Corero has a significant opportunity SmartWall launched in H and first customer sales Target market telco s/isps, Cloud providers, data centre operators and large enterprises - Significant increase in addressable market Well positioned for growth Experienced management team 10

12 Appendix: Customer Case Studies

13 Customer Testimonial: Hosting Provider PROBLEM: SOLUTION: Proactively planning for security needs is one thing, but this Hosting Company felt the pain of being unprepared for a DDoS attack. Experiencing 24 hours of downtime at one point, impacting their customers and SLA agreements. Initially, they tried to work with their providers to block IPs to fend off the attack, but that was totally ineffective. The company was only able to get out from under the attack by temporarily redirecting its DNS to an outside filtering company. Once the attack ended, the Company vowed to never lose control like that again. The Company wanted an on premises solution to control and manage themselves. The Corero First Line of Defense solution was quickly identified as the best overall solution. Other products and services were not or purpose-built for the DDoS challenge. Multiple solutions were evaluated and none compared to the advanced DDoS protection and comprehensive visibility into the network traffic. In addition to the advanced protection they receive, the Company plans to offer value-added services around security based on the Corero reporting capabilities. Hosting Hosting The most important thing is that Corero protects our customers networks and their data. That is critical to our clients, which makes it critical to us. The second thing is that it helps our security department run more smoothly. We now have we have less unwanted traffic coming in, allowing us cut our bandwidth costs, and we have a faster network with reduced latency. And not only do we save money, but the added security that Corero provides helps us generate revenue through new solution offerings. A1

14 Customer Testimonial: Banking Institution PROBLEM: SOLUTION: This High Profile Wall Street firm experienced relentless DDoS attacks. The firewall was taking the brunt of the attack traffic causing overload at 95% utilization, shutting down all network traffic. It would re-boot, and traffic would flow for a few minutes, then grind to a halt again. The attempt at a resolution was to perform reverse lookups to attempt to manually block the attacking source IPs. That was time-consuming, labor intensive and, worst of all, ineffective, as the firm was hit by 10,000 attackers from almost every country in the world. The First Line of Defense solution was deployed, and almost instantly removed the attack traffic from the equation. The power of the Corero device is in its design, ease of use and single purpose to provide the First Line of Defense to proactively stop attacks while moving legitimate traffic without delay. With the firewall and other downstream IT security devices back to functioning as intended, this Wall Street Financial Institution was quickly back to delivering online banking services to their customers. Large enterprise Large enterprise The Corero First Line of Defense solution was installed in 45 minutes, and it was like shutting off a water faucet. Hackers stopped, traffic delays were gone, and the firewall was back down to single digits. System downtime frequently results in lost productivity, lost revenue, lost customers and lost opportunities. If a system is down, the staff cannot work and goals cannot be accomplished. Since we now know and understand this, we know we can call on Corero to prevent downtime. A1

15 Thank you

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