Here are my notes from the Zscaler (ZS) Bank of America Global Technology Conference that ended a moment ago
06/07/2023 11:20 Central Time
Jay Chaudhry, CEO
Q What creates so much volatility
A Cyber is in much better shape than a lot of sectors. Engagement and pipeline has been strong and refined go to market in Q3 and demonstrated better ROI through new stuff. Wrong information from some companies. C-suite sell. If transformation is happening across the world, shouldn’t each company be checking themselves periodically?
Q Gardner’s magic quadrant went down.
A Jay said he should have engaged with Gardner better. Customers provide input on 8-9 buckets.
Zscaler is number one in 8 of their 9 criteria.
Other areas resilience/reliability of the cloud. Not looking at the smaller companies because they don’t even know if they’re going to be around. Focus is not on CASBY, rather, the focus is on cybersecurity.
Zscaler pioneered the notion of a switchboard.
Cyber- make nothing comes to attack you and _____(?) so nothing gets out from you internally.
Casby created so there’s no over-sharing of information .
Biggest deployments are DLP, and Zscaler is deploying DLP. Zscaler has made investments to be sure their Casby offering is strong.
Q ZIA PIA: CNAP. Where are you vs. PaloAlto. Where are you in the journey securing a company’s information in someone else’s cloud.
A CNAP is part of protecting the cloud workforce.
2 types of security needed:
- Communications Security
- CNAP is about protecting workloads through API’s. CSPN and Permissions are important to be protected. ZS did two acquisitions to make CNAP happen. ZS will not lead with CNAP
Q Palo Alto made 7 acquisitions to get CNAP. When you think about shift left starting in the developer community, where is ZS?
A ZS comes in on the operations side to make sure nothing gets compromised. ZS is moving left slowly. It will be difficult for any company to become a developer company. Doing container level work is far more complicated than acquiring companies to accomplish container work. ZS wants 6 things to offer 2/ 25% market rather than 12 offerings w/ 3% coverage.
ZS is focused on ARR growth in lieu of number of questions and is executing pretty well.
Q Sentinel One talks about weakening environment. Where are we re: SASE (me speaking here. SASE is defined as a cloud architecture model that bundles together network and cloud-native security technologies and delivers them as a single cloud service. SASE lets organizations unify their network and security tools in a single management console -Source: www.techtarget.com)
A ZS is selling consolidations of bundles of offerings that have exceeded ZS’s internal expectations. We believe that customers will continue to do this.
There is scrutiny in the market and it’s not going away. If you engage at the C level than if you’re selling at the C level. ZS feels good about the market. They have a record pipeline. They have to work harder and smarter than they had to a year ago. Competition has become better in a lot of ways and the riff raff has gone away.
Q Sentinel One said it’s a tough market. Is it only in endpoints or other segments?
A ZS is getting wins because of their architecture. They don’t have competition from companies who are lowering their prices. Not a lot of competitive pricing competition. People don’t want to save a few dollars and simultaneously create cybersecurity pressure. I think we’re doing great.
Q Zero trust. What does it mean practically and for ZS.
A It’s unfortunate that the concept of zero trust has been hijacked and no longer has meaning. Met w/ DOD and discussed zero trust. The legacies are talking about zero trust, but it’s meaning has been watered down.
Once you get into the network via access through a firewall or VPN. You cannot make a firewall or VPN into zero trust. (Me speaking: was this a subtle slam to a competitor?) Can you claim and spread information? Yes. The reason they’re winning these deals is because their customers understand zero trust. Protecting users requires a proxy architecture with lots of protection. It takes years and years to create proxy architecture. 2 that work well are Blue coat and another is proxy that ZS is creating.
Q The existing players ZS and PaloAlto are doing more. Touch on Sassy in the context of data protection.
A I think that statement is untrue. Data at rest gets done by CNAP. Our customers are saying I need one DLP policy to apply to data at rest, in a data center or in a data center. Customers aren’t looking to buy small point products. Almost all the small companies will be bought because they cannot compete with the $ the bigger companies can bring to bear.
Q SASE
A We haven’t done SD WAN, although Gardner says it’s needed to do SASE. Customers are asking for it. ZS focus is on delivering value in a new way because some of the old technology can create exposures.
Note from me: Although the moderator seemed to give Jay Chaudhry the opportunity to slam Sentinal One, Jay didn’t take the bait, other than perhaps he could have been intimating about Sentinel One when he said the smaller companies may get bought up/acquired.
sjo