“Only” an identity management platform is like saying that Twilio is “only” a communication API. What they both do is very valuable and difficult to reproduce, even though many can try.
To put things in perspective, although Zs is a platform, and Twilio and Okta may be API plug-ins into the software stack, Zscaler itself is a plug in for VMWare, for Azure, as examples, that are even larger platforms, and form part of their software stack.
Zscaler I am sure works with Nutanix as well, although I am not aware of an official plug-in and partnership with Nutanix as VMWare has. Nevertheless, Nutanix is not going to do what Zscaler does either, anymore than VMWare is. Nutanix is looking to provide security, but security throughout the network that is not covered by traditional solutions (whatever that means).
There are platforms incorporating platforms, incorporating platforms. Microservices. Some are more valuable then others in terms of value add.
Bert had an interesting point about this from an Alteryx article he did last year. In it he compared Alteryx with Microsoft Bi, Tableu and Qiu (or whatever that company is). All the comparables were mostly visual and not analytical or ETL like, nor machine learning implementation.
Bert concluded that Alteryx created a much better value add than these visual programs, which is why their businesses have not been very successful in the scheme of things.
In the same way some of these platforms that become plug-ins for other platforms (as Okta is a platform, Twilio is a platform) provide greater value add than others. The ones that do not provide enough value add will not have sufficient economic returns in the end to make them great investments.
I bought Twilio at the IPO and identified it immediately as something special. I also sold it at the top when the secondary happened (as I had seen that before) and then turned on it with the Uber thing because I figured it Uber could take it internally, then any enormous consumer could do the same thus limiting Twilio’s value add. Others had similar concerns because of the lower gross margins due to having to pay public communication access fees and whether or not they can ever become greatly profitable.
That conclusion may turn out to be wrong.
But to cut it short, and make no conclusions other than set out the idea, consistent with Bert’s point, those platforms that provide enough value add may be great long-term investments. It is up to us to figure which of these companies are those companies.
Tinker