This week, I got a call from my bank — apparently, someone in Mexico tried to hack into my account.  The good news was that it was prevented, but I had to change my account.  It was the second time so far this year.

Unfortunately, it looks like hackers are getting more aggressive and going after big targets.  For example, Citigroup (NYSE:C) recently had to replace 100,000 credit cards because of a security breach.  Then there was the exposure of about 100 million user accounts for the Sony (NYSE:SNE) PlayStation.  The company even had to take down the service, which was certainly costly – and a hit to its reputation.

Yes, it’s a scary world.  In fact, the Pentagon has indicated that cyberattacks represent an “act of war.”  Even North Korea is setting up a cyberwarfare system.

 So, it should be no surprise that there is a scramble to improve online security.  And this should represent a boost for the top companies in the sector.

Let’s take a look at some of them:

Check Point Software (Nasdaq:CHKP):  Founded in 1993, the company was a pioneer in Internet security, such as with its firewall technologies.  Since then, Check Point has continued to introduce innovations.  One of the most recent is the Software Blade architecture.  It allows for customized security solutions. 

But the company goes beyond just software.  For example, it understands that effective security is about having a strong process.  The company calls this “3D security,” which involves policies, people and enforcement.

In the latest quarter, revenue increased 15% to $281.3 million and cash flow from operations was $211.6 million (there is also $2.5 billion in the bank).  Yes, it is a high-margin business. 

Check Point has tens of thousands of customers, which range in size from small businesses to Fortune 100 giants. 

Sourcefire

(Nasdaq:FIRE):  The founder of the company, Martin Roesch, is the creator of the open source software system called Snort.  It is the most widely deployed intrusion detection technology.  Total downloads are roughly 4 million.  Essentially, Snort has been a great platform to add value-added services to customers, such as with cloud-based products.

In the latest quarter, Sourcefire’s revenue increased 19% to $30.8 million, even though there was some softness because of budget constraints by federal agencies.

But Sourcefire is making strides in boosting its commercial business.  A big part of this is through the company’s growing number of channel partners.  

Fortinet (Nasdaq:FTNT):  The company provides network security appliances, which are primarily based on subscriptions.  Its main product offering is UTM, which has things like firewall protection, antivirus, intrusion protection, Web filtering and even anti-spam.  This integrated approach has been quite popular, in terms of easier administration and total costs. 

Also, Fortinet is making investments in security for mobile devices.  No doubt, this should be a big growth opportunity. 

In the first quarter, Fortinet generated revenue of $93.3 million, up 34% over the past year. 

A key sign of Fortinet’s technology prowess is that the first quarter saw a 48% increase in product revenue to $40.2 million.  This will lead to ongoing services revenue in the future. 

Tom Taulli’s latest book is “All About Short Selling” and he has an upcoming book called “All About Commodities.”  You can find him at Twitter account @ttaulli.  He does not own a position in any of the stocks named here.