It looks like the new cloud security product competes directly with OKTA and maybe ZS.
https://www.zdnet.com/article/palo-alto-networks-announces-p…
My fist impression is not to worry to much about this because:
they already have 9000 customers on it, it’s not really a new product and OKTA and ZS have been competing against it already
the market is huge and there is room for many players
Something to watch though. Curious what others think.
Jim
Jim
I would ignore Palo Alto at your peril. It may be easy to dismiss Palo Alto (PANW) or any player as an irrelevant incumbent that an up and coming player like ZS or Okta is about to take down, however Palo Alto were the definitive up and coming competitive success story and I’m pretty sure aren’t done.
They took down and crushed the original incumbent - CheckPoint with their Next Generation Firewall and suite of products. I remember getting into PANW and shifting across from CheckPoint when PANW were growing 40%+ YoY and CheckPoint was dipping to single digits when CheckPoint was twice the revenue as Palo Alto - not anymore PANW have move into another league now. Legend has it that the guys made it a personal mission to beat PANW - so much so they took out a permanent advertising slot on a billboard outside the CheckPoint offices in Tel Aviv to advertise Palo Alto.
Palo Alto have put their sales model transition behind them now (a few years back) and recently hired a CEO of remarkable stature who is all about the cloud - he is managing the cloud and SaaS transition very very carefully and balancing contract lengths, margin and cashflow tradeoffs! They see the cloud security as an underserved market with a $2Bn TAM and growing.
Anyhow - they talked quite a bit about Prisma in their earnings call (where they beat on top and bottom and guided in line - they grew top line by 28% and cloud subscriptions by 35% and delivered GM of 76.5% and 30% growth in non GAAP inc) and gave a useful glimpse at the numbers too. Here’s an excerpt or two from the transcript (worth reading in its entirety if get the chance)…
Now let’s talk about securing the cloud. We continue to be highly focused on delivering technology that enables our customers in the cloud journey. We plan to enable this by delivering a comprehensive set of security capabilities across a broad set of clouds and cloud configurations. This focus and our speedboat approach has led to tremendous progress over the past year.
With this, we are delighted to introduce Prisma. Prisma, announced this morning, brings our industry-leading cloud solutions within a single suite to help our customers in their cloud journey. Whether you want to connect your mobile users or branch offices to the cloud, protect your application and data in the public cloud, protect your SaaS applications or are worried about upcoming trends in container security and service computing, Prisma has a solution.
Prisma is our approach to deliver industry-leading cloud security products in an integrated fashion. It will address SaaS, API-based and inline cloud security across all vectors. We will continue to build on Prisma over the coming quarters and years to make it the industry leading platform for the journey to the cloud.
We believe Prisma is already the number one suite of cloud security product in the world. This quarter, Prisma surpassed $0.25 billion billings run rate and has approximately 9,000 customers.
The products that comprise Prisma are already industry-leading in their own right. Take the VM series, we believe we deliver the most VMs across the public cloud landscape, with more than 66 figure or higher deals this last quarter alone.
RedLock, which forms the basis of Prisma public cloud, surpassed $100 million billings run rate this quarter. What is even more exciting is that we won more than 10 RedLock deals, each over $0.5 million, in the third quarter with over half of them in the Global 2000. This is a rare feat, to acquire a company, transform its revenue and its profile and trajectory in 6 months is unheard of.
Additionally, we’re very excited about the new enhancements for our GlobalProtect Cloud Service. The next version includes cloud onboarding and management interface, and will be available in the Google Cloud platform shortly.
In this quarter, we continued our success on GPCS by securing 40,000 mobile users at the biggest car company and their category, 27,000 mobile users at a leading global consumer brand and 25,000 mobile users at one of the largest high-tech companies as well.
The success of RedLock is a key factor in making us #1 in cloud security and gives us the confidence that our introduction of the Prisma suite will bolster our ability to keep winning in the space. In addition, today’s announcement of our intent to acquire Twistlock, which is the best in its category for container security, will bring best-of-breed products into the Prisma suite.
and in Q&A…
…we had very strong performance in our cloud products. The mix of our Prisma public cloud this quarter was very strong. We saw terrific growth as Nikesh mentioned in his prepared remarks. So we’re really excited about the trajectory of that business and the opportunity for us there.
…But all I will tell you is you can see the way our cloud security business is beginning to perform. I think we said Prisma has already gone over a $250 million run rate billings run rate this quarter. And it’s growing at very, very robust growth rates, way ahead of the company growth rate, as you can imagine…
…Michael Turits
And then, Nikesh, I wanted to ask about GlobalProtect Cloud Services, and to be fairly specific about it, competition with Zscaler. How do you see that competition? And do you feel that with them potentially moving to certain firewall applications, it’s necessary, perhaps, for you to do more in the proxy area in order to make sure you’re competing on an even basis?
Nikesh Arora
I’m going to defer this question to my friend, Lee, even though I’m sure I can butcher the answer, but I’d rather let him do it.
Lee Klarich
Yes. We - look, we’ve been very consistent, we talked about GlobalProtect Cloud Service, which is now Prisma Access. We believe that, fundamentally, you need to be able to secure all applications. And the way to do that is with a next-gen firewall foundation in the service, which is something that, clearly, we have a unique and distinct advantage of and is fundamental to how Prisma Access is architected and how it works.
As we mentioned in the launch announcement today with Prisma, there are a couple of key enhancements coming to Prisma Access. Number one is we are going to be supporting GCP as a public cloud foundation in the near future. That will extend Prisma Access out to 100-plus locations around the world. So from a pure network latency performance perspective, we believe we’ll be the best at the performance side of service.
And second, we announced that we will soon have a cloud management service to go along with it, such that for customers who want the entire service to be done through the cloud, we’ll be able to support that from onboarding, to configuration management to monitoring.
https://seekingalpha.com/article/4267186-palo-alto-networks-…
Ant
I see that Zscaler is up 3% this morning, following the Palo Alto announcement. It doesn’t seem that the market is really spooked by the announcement.
Saul
Ant,
Thanks for your feedback.
I agree, PANW is certainly one we need to watch.
It looks like they are competing with both ZS and OKTA, and with a $250 M run rate, they are behind at this point since they are smaller than both, and way smaller than both combined.
PANW does have a huge advantage, a large installed base. So if their product is comparable to ZS or OKTA, they could do very well. Their installed base could make up for not being the first mover.
It’s going to be interesting to watch, how hard PANW wants to push their cloud product, because it would cannibalize their hardware some I would think.
I think the market is big enough for all, but needs our attention.
I found it interesting that they are partnering with Google, over AWS. Google is stepping up their game to compete with AWS and Microsoft for the cloud.
Jim
I think we got our answer on what ZScaler thinks of Palo Alto Networks and their Prisma product.
From ZS earnings transcript:
CEO Jay Chaudhry
"Let me say a few words about the competitive landscape. As organizations increasingly make the shift to the cloud, traditional firewall and VPN vendors are finally acknowledging that the legacy security appliances (can’t) secure the new digital enterprise and are attempting to build a security cloud using single tenant software designed for on-premise appliances just like you can’t create a Netflix service by stacking thousands of DVD players in the cloud.
You can’t offer an inline high performance security cloud by spinning up a bunch of virtual machines in a public cloud. This is a defensive strategy of cloud imitators, which in our view serves the self-preservation of the vendor not the needs of the customers. We believe, we have a significant competitive advantage as a result of the technology, architecture and maturity of cloud security platform including one, we were born in the cloud, for the cloud just like Salesforce and Workday.
Two, we have a purpose built globally distributed multi-tenant cloud for fast user experience, unlike imitation cloud, Zscaler requires no back hauling from front doors to a central compute data center of a public cloud.
Three, we perform SSL inspection at scale as a purpose built proxy for better security. Four, we deliver zero trust network access that provides application access without network access reducing business risk unlike firewalls and VPN’s.
And lastly we have over 10 years of experience running a mission critical inline cloud for Global 2000 customers, processing 65 billion transactions a day. As someone said, it is really no compression algorithm for experience. We continue to innovate and invest in maintaining our significant technology lead."
Jim