The tech industry’s biggest little company, firewall vendor Palo Alto Networks, filed last week for an Initial Public Offering (IPO) which will raise $175 million (£110 million).

Founded in 2005 by former NetScreen CTO Nir Zuk the year after that highly-rated company was bought by Juniper, Palo Alto has risen to prominence as a pioneer of what analysts call 'next-generation firewalls.'

This is a technological movement that reinvents firewalls to monitor application traffic, relating this to department and users in real time.

Nothing travelling across the network should be invisible to a next-gen firewall. Established firewalls looked at protocols and packets, a form of defence that has looked increasingly obsolete thanks to the dawn of application-aware systems.

Traditional firewall vendors have since embraced this concept, but the USP of Palo Alto is supposed to be that its systems are designed to do this job 'from the ground up' rather than having it retro-fitted. That gives them advantages in terms of management, or at least that is one of the claims made.

The weakness of Pal Alto’s approach is that it requires high-performance hardware inspection, which makes its products expensive. In defence of that approach, enterprise firewalls can be hugely expensive system regardless of whether they boast advanced application inspection or not.

The company is also being sued by rival Juniper Networks, which alleges patent infringements dating back to founder Zuk’s days at NetScreen.

The company’s S-1 filing with the US Securities and Exchange Commission (SEC) revealed that at the end of its last financial year on 31 January 2012 the company had 6,650 customers in 80 countries, revenue of $118.6 million and losses of $12.5 million.