Cyber security is a fast-growing industry as the usage of the Internet expands across the globe. According to research, the cyber security market will be worth as much as $155.74 billion in the next five years. The growth of this market will be driven by the need for various products and services such as Antivirus/Antimalware, Firewall, DDoS Mitigation, Disaster Recovery, Security Services, Web Filtering, etc. As such, investors should take a closer look at Palo Alto Networks (PANW, Financial), a company that is using the opportunity present in the cyber security market to its advantage.
Stealing a march over rivals
The company has won more business by displacing rivals such as Websense, Bluecoat, and Cisco (CSCO, Financial) for perimeter security at a Fortune 10 company. It has also replaced Cisco and Check Point (CHKP, Financial) in a global companywide deployment at one of Asia’s major financial institutions, along with replacing them as the key datacenter firewall for a major security company in the U.S. These are just some of the examples of how Palo Alto is aggressively increasing its customer base. In fact, the company now has 21,000 customers globally, which means that it has a better opportunity of selling and cross-selling its different products.
Focus on product development is helping it gain more business
Given the company's focus on product development, such a strong customer base does not come as a surprise. Palo Alto's security platform provides customers with an advanced, integrated and comprehensive prevention and protection solution. This is the reason why its products are gaining good traction in the market.
For instance, in the datacenter use case, Palo Alto Networks is increasingly witnessing the solid adoption of its PA-7050 product. The good thing is that customers are buying this in volumes, as a worldwide service provider purchased over a dozen chassis, while an oil-and-gas company enhanced its current deployment by ordering eight extra chassis. Thus, the company is getting recurring customers for its datacenter product. Now, to strengthen its position in this segment, Palo Alto has introduced the PA-3060 for mid-sized enterprise customers’ datacenter use cases.
Meanwhile, in the relentless threat solutions category, Palo Alto is using WildFire’s automated and integrated prevention abilities to its advantage and has built up a base of 4,000 customers. Additionally, the company has integrated WildFire with Traps, as a result of which it can now provide malware prevention across the network in real time. Hence, the company is making good use of Traps, a technology that it had acquired earlier this year.
Since this service is efficient at stopping attacks, it has gained traction in a short period of time. Moreover, the integration with WildFire will allow Palo Alto to provide better services and functionality.
The public/private cloud opportunity
But, Traps and WildFire aren't the only product bundles that are expected to drive Palo Alto's growth. The company is also partnering with VMware (VMW, Financial) for providing complex and integrated security to the latter's public cloud platform, known as vCloud Air. As a result of this partnership, enterprises can use a combination of security solutions that are powered by Palo Alto Networks and VMware for both the private and public Cloud environments.
Now, on the back of this partnership with VMware, Palo Alto will be able to tap the security needs of a growing public/private cloud market.
Conclusion
Since Palo Alto already has a good track record of displacing its rivals with its product bundles, it won't be surprising if its revenue growth accelerates on the back of the public/private Cloud security opportunity.
