Zscaler is brought up 10 times in the PANW ER.
The PANW ER CC is an interesting read…I skimmed (day job) but very combative.
I believe they basically said “we get the market loves zscaler and SaaS, but we are not going to go that route” and then they bashed crowdstrike, zscaler, sd-wan…etc
Kudos to PANW CEO for not wanting to go down the NTNX rabbit-hole of declaring a full transition from hardware to software.
Apparently this was sort of an ER and Analyst day in one. Not positive, as I don’t follow PANW ER’s.
"Now many of you are so kind, you’ve written me very long notes about what do you want me to tell you, which we’re going to make you happy. It’s very helpful. Just like I have my marching orders you’ve given me the script. So Keith Weiss from Morgan Stanley, yes, we will talk about product evolution M&A. Keith Bachman talks about depth and duration of depressed cash flow stands very depressing, but we’ll talk about that they’re not depressed.
We will go down to the details of our next generation security business and explain the financial models around you, they don’t get spooked by duration issues. And yes, Brad, no hardware company of this size have made a transition like this, but hopefully we just need to keep growing and not make the transition.
You do notice that we’re displacing your favorite company Zscaler and many situations. So, but I’m scared today, we had changes or recommendations, something is going to happen to the rest of you guys. "
Nir, the CTO, is particularly combative…but often that is how a CTO is: very passionate about their architecture and their solution as being the best.
Talk to a NetApp CTO, and guess what, NetApp is the best. Talk to a Pure CTO or an HPE CTO or a DellEMC CTO…you get the idea.
PANW has been constantly pivoting for years now. They, like Cisco, viewed security as a networking problem. More large orgs are moving now to a setup where their DCs are shrinking, and they are more concerned about their remote sites (branch offices, plants, mills, factories) and how to leverage their data and to create more data, leveraging IoT at the edge. Data Analytics can be done at the edge (rather than sending back to main DC) and burst up to cloud from the edge. So the standard way of everything getting routed thru the main network and to the main DC is not how things are being done moving forward. So PANW pivoted to endpoint, and then they had to pivot to cloud-based security. They even admit on the call:
“I anticipate that there are a number of cloud security technologies that haven’t been invented yet, but we will have to be thinking about. And we will continue to be very decisive and purposeful about building out this platform and continue to maintain its position as the most comprehensive solution.”
So PANW is basically saying “hey…as security changes, we are the best to adapt cause we have a lot of experience and there are too many security vendors out there and customers want less security vendors in their environment to manage”.
Not a bad argument, but it in no way negates Zscaler or Crowdstrike or Cisco or VMware+Carbon Black, etc…