Cato Networks CEO On How ‘Myopic’ Focus On SASE Is Helping It Win Against Cisco, Fortinet And Palo Alto Networks

“Seventy-five to 80 percent of the appliance install base is going to [need to be] replaced. The Palo Alto, Fortinet, Cisco, Checkpoint, all of them are going to try to preserve as much as possible from this install base, but Cato is coming in without any baggage and going into that cycle of replacement with a completely ground-breaking approach, and we'll take as much as possible from [that] base,” the SASE specialist’s founder and CEO, Shlomo Kramer, tells CRN.

Cato For The Win

Cato Networks has been developing Secure Access Service Edge (SASE) technology since its start in 2015, years before the market caught on, according to the company’s founder and CEO, Shlomo Kramer.

Research firm Gartner in 2023 published its first single-vendor SASE Magic Quadrant report, which arguably put the technology on the map. The networking and security worlds are coming together for the first time, which is spurring a growing market and customers hungry for SD-WAN and security tied together into one cloud-based offering.

That means the market has finally caught on to what Cato has been up to, Kramer told CRN.

Cato Networks spent 2023 become an increasingly formidable player in the SASE market. The standalone, Tel Aviv, Israel-based tech firm that is singularly focused on SASE this year brought on channel powerhouse Frank Rauch as its new global channel chief and it’s using the power of partners to help spread the word of its technology. It’s paying off — Cato’s cloud-based SASE offering, once in the hands of enterprise customers who see what it can do, is winning at a rate of 70 percent of the time when up against the competition, according to the company.

Kramer caught up with CRN to talk about the once-separate networking and security markets and Cato’s unique approach to the market that is leaving networking and security incumbents, such as Cisco Systems, Fortinet, and Palo Alto Networks behind.

Here’s what Kramer had to say.

What was the big headline for Cato Networks in 2023?

I think the big headline of 2023 is the SASE market moved into stage two. Stage one was 2015-2019, which was [when] we did SASE and nobody knew what it was exactly and nobody was sure whether it was possible to do it or whether it was the right architecture. In 2019, Gartner came out and said: “This is the future of network security and the future of network security is in the cloud.” That started four years of battling in the early market of whether it's single-vendor SASE, it's proxy-based, it's network-based, this and that. 2023 started the next phase. [Now] there is a Magic Quadrant and [among] the analysts, Cato is a leader in the majority of them. It's definitely on the shortlist for all of the [analysts.] There's a clear winning approach in the market: single vendor SASE. So essentially, [many] companies are just networking or just security. [Some companies] essentially abandoned their SSE positioning and SD-WAN companies are claiming to have east-west who don't really have yet, basically claiming to have a cloud network. Zscaler coming out with an SD-WAN appliance, Fortinet saying that they're going to imitate Palo Alto by [putting] appliances on Google Cloud. That was the winning approach, which was basically the CATO approach to start with and we ended the year being the only company that could deliver the platform. We ended the year with a statement that says SASE is not only a market, it's a concept, and the concept says that the market was focused for too long on the “what.” What is the functionality? What are the effects? What are the vectors? This created a huge mess of point solutions and created a broken market for everybody but the very large enterprises that can throw any amount of money at the problem. The problem requires a solution, and the solution is SASE but as a platform, and not as a portfolio piece, that really changes not only the functional value the customer gets, but the operational value the customer gets. It really makes networking security available and possible for every enterprise because the economics of consuming it is completely different. It's a platform, and right now only CATO platform has that platform, and going into next year, it's all about making the most of this advantage in terms of taking market share.

Seventy-five to 80 percent of the appliance install base is going to [need to be] replaced. The Palo Alto, Fortinet, Cisco, Checkpoint, all of them are going to try to preserve as much as possible from this install base, but Cato is coming in without any baggage and going into that cycle of replacement with a completely ground-breaking approach, and we'll take as much as possible from [that] base.

How does Cato compete against the likes of some of the networking and security heavyweights with brand recognition?

[With] customers that try our product, we win 70 percent of the time. So, the question is, really, how do we get customers to have that SASE experience and experience Cato and understand. Why make the security [move] with the speed that transformation requires of them. [With other companies like Palo Alto/Cloudgenix] you've got a portfolio of things duct taped together and that's not going to change your "how." SASE is all about the "how." How do I cope with the ever-increasing amounts of threats? And how do I move at the speed of digital transformation? How do I reduce the costs? How do I find the people that are experts to handle this? People that get the [Cato] product understand the "how." There's no added value from the "how" perspective from a portfolio company, such as Cisco. Cisco doesn't have a real solution, they just started in SASE.

How big is the SASE opportunity for partners?

This opportunity …according to Gartner is going to be $25 billion [by 2027] and when you think about the SASE market, using the Gartner definition of it, it's going to eventually replace the firewall appliance market, as well as the cloud proxy market, which is the Zscalers and the Netskopes and others. The opportunity is very, very big. That's all Gartner, but what I have to add is that it's even bigger because the concept of providing the better "how" through cloud delivery and convergence to a platform is going to expand beyond network security in the firewall market and to other areas in security. It's going to be much broader and much bigger. So, this is actually even bigger than what Gartner is saying. And whoever is interested in being a strategic player in the security market in the future should jump on the SASE wagon.

We are a 100 percent partner company, so 100 percent of our business goes through partners, and more than 50 percent of our business comes from partners. So, over the years we've built a great spectrum of partners ranging from the telco partners to the security advisors to MSPs to SIs. We are just in the beginning of the journey of going upmarket and signing up larger partners. The partners also see the revolution. For the first time, the buying cycle of network security converges with the buying cycle of network. That has not been the case for the last 30 years since network security started. It's been largely separated, so we are seeing a maturing of the buying cycles in organizations, much more collaboration between the networking and network security team, and much more strategic understanding of the importance of this convergence by the CIO, and much more maturity in the channel to develop the converged capabilities, whether you're coming from the networking side or from the security side.

How have you seen the channel grow under channel chief Frank Rauch (pictured), who you brought on this year?

We are seeing a few major shifts, I talked about one, which is the security channel embracing the networking side and vice versa. The folks that sold SD-WAN are now selling security and the folks that sold security cloud or just firewalls are now selling also cloud network and SD-WAN and we're seeing the telcos traditionally have competed with SASE because of MPLS embracing the fact that business is going away and packaging the SASE solution with their managed services and becoming partners. The same goes for MSPs that perhaps in the past, [they] were more focused on SD-WAN and now converting their install base to SASE. Traditionally, single vendor SASE was for mid- to-large enterprises and it's been going upmarket. It started in the mid-to-large because that's where the complexity problem was most acute and that's where the buying centers were most aligned. It's going upmarket because that vision of a single vendor SASE has won and it's becoming more accepted in larger and larger organizations and that attracts larger partners. We have been working with a number of them to activate them and get them effective.

For us, channel is perhaps the number one network for us for next year. It's all about how we get more chances at bat, and the answer for us is channel. [Rauch] has bought a whole management team in, [and we are making sure] what we offer really fits the channel and provides superior margin and superior scalability.

What can partners expect in 2024?

I want them to know that with Cato, there will be a solution that would provide them better margins and better scalability and it is a solution where you put it in front of a customer against any other solution in the market because it is superior, because it is a platform, because we invented SASE and we are the only ones that build it from the ground up. We have, as a company, a single, myopic focus on SASE and we win 70 percent of the time.