I run a commercial Web server out of my home and for years I haven't considered using a firewall, but recently...
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I got hacked. I installed a desktop firewall, ZoneAlarm, but even Zonelabs admits that it's not a server product. I spent the last several days looking for a software-based server firewall I could afford and haven't had much luck. There seems to be a substantial gap between enterprise and desktop editions. There doesn't seem to be anything in between. Looks like it's either $25 or $2,500. I would consider a price range from $500 to $1,000 acceptable. Do you have any recommendations?
The short answer is no. I personally believe that host, or in this case server-based software, firewalls are good as a backup but not as a primary line of defense. You are much better off having a firewall separate from your server. The reason for this is that if your firewall is part of the server it is protecting, attacks are reaching the machine. If it is a separate firewall, you have the chance to stop the attack before it ever gets to the server.
If you are still going to look for a software-based firewall, I would look into the NetFilter project (http://www.netfilter.org). Another good piece of software is the Okena StormSystem series (http://www.okena.com). While not a firewall per se, it is an intrusion-prevention system.
You might also want to investigate some of the DSL/cable router/firewall boxes from Linksys, D-Link or NetGear. They may have sufficient capability to allow access on ports 80 and 443 only (if you provide only Web services). That alone is not good enough though. You need to ensure that you still have the latest patches for your server software. You need to ensure that none of your CGI scripts can be exploited and much more. Firewalls are just the start.
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