Shlomo Kramer’s Cato Networks Out To Redefine Networks And Security, Again

POSTED on April 20, 2017

A Series of Profiles of Thought Leaders Changing the Business Landscape: Shlomo Kramer, Cofounder and CEO, Cato Networks

When Shlomo Kramer speaks people listen–at least when it comes to networks and security. He’s earned his reputation by founding two successful, publicly-traded security companies–Check Point and Imperva. Check Point, which Kramer founded in his grandmother’s apartment in the early 90’s, now has a market cap of more than $18 billion, with Imperva close to $1.5 billion.

Now he’s at it again with Cato Networks.

“Cato is my third startup, and with Cato I’m going back full circle to networking and security, which was my original interest when I started my career. The fresh look comes from looking at what’s going on in the wide-area network and Internet boundary of the organization, and looking at the two technology stacks that we’re implementing,” says Kramer referring to the MPLS and perimeter infrastructure, which is primarily firewalls, that represent a $60 billion and $12 billion market respectively.

According to Kramer, both stacks are 25 years old, and we’re geared towards a a bygone era when organizations had a static traffic pattern from a well-defined physical location, like a branch office to a data center or from one office to another and perhaps a bit of traffic going out to the Internet. Physical appliances that protect a specific single location and point-to-point MPLS links that are carrying traffic between those static locations made sense in that environment.

Today traffic patterns come from anywhere and anytime. This dislocation between the technology stacks of MPLS and firewalls and appliances and the modern shape of the business causes tremendous pain to the organization and large costs in terms of back-hauling Internet traffic over MPLS, that required point solutions with a deep security stack distributed in lots of locations.

“It’s really a broken situation,” says Kramer who is out to fix it with Cato by providing a secure cloud network that eventually replaces MPLS. “I think the cool idea that we had at the beginning of Cato, it’s that real software-defined networking is not only about separating the control plane from the data plane or having multiple fabrics beneath you that can work with both MPLS and Internet. All of that is important, and we do all of that. But the core is a software-defined network allows you to embed a lot of capability in the data plane and makes the data plane itself very, very smart,” says Kramer.

The Tel Aviv, Israel-based Cato, formally founded in 2015, is growing fast, with over 60 employees with offices now in Singapore and Atlanta. Not surprisingly, the company has attracted $50 million in venture funding from US Venture Partners, Aspect Ventures, Greylock Partners, Singtel Innov8, plus Kramer’s own personal funds.

Kramer is himself a cyber-security business building and investing machine. In addition to the companies he has started, he invested in and helped incubate companies like Lacoon and Hyperwise that were sold to Check Point. LightCyber, a company he invested in and sat on the board, was recently bought by Palo Alto Networks for $105 million.

Kramer grew up in a suburb of Tel Aviv called Ramat Gan and was into computers at a very early age. His startup mentality also began early. “I remember the moment where I first learned what a startup is and immediately knew that that’s what I want to do.”

When he was 16 years old, he worked in personal computer sales after school in a computer store and discovered that there was a business in computer games. “Somebody told me that there’s a 17-year-old kid in the U.K. that developed this game and he’s got this company now and he’s selling these games all over the world. I knew then that I wanted to be like that,” says Kramer.

He never did work for a regular company, earning a degree in mathematics and computer science from Tel Aviv University before going into the Israeli Defense Forces where he spent the next five years in army intelligence. That’s where he met his Check Point cofounder (and still CEO) Gil Shwed. “I think in the first or second conversation, I told him about the fact that I wanted to do a startup, and it turned out that he wanted to do a startup as well,” says Kramer. Gil was 19 and Kramer 21 at the time.

The years in the army slowed down their plans. They went their own way after the service. Kramer founded a medical imaging company Algotec that he sold to Kodak. Then five years after they left the army they collaborated on Check Point.

Kramer’s track record for creating significant security businesses is well established. So its no surprise he is enthusiastic about the future four Cato.

“We are really excited. We launched July last year, and we’ve seen tremendous growth in the business. I believe this solves a big problem in the market and it can be a platform company. My hope is that we can become the leading company in secure cloud networking.”