Palo Alto Networks CEO Is ‘Spot On’ With Platform Strategy: Partners

CEO Nikesh Arora is making the right moves to drive tool consolidation on the cybersecurity giant’s broad platform, partner executives tell CRN.

Led by CEO Nikesh Arora, cybersecurity giant Palo Alto Networks is making the right moves to drive tool consolidation on its broad platform, according to solution and service provider executives.

In February, Arora disclosed a dramatic overhaul of Palo Alto Networks’ growth strategy—despite the fact that the company had been beating expectations for its business and recently had become the first pure-play cybersecurity vendor to achieve a $100 billion market capitalization.

The strategy shift is aimed at speeding up adoption of tools on the vendor’s consolidated security platform, although Arora acknowledged that the company would need to sacrifice some growth in the short term to accomplish its “platformization” goals over the longer haul. Shares in the company sank 20 percent in the immediate aftermath of the Feb. 20 announcement.

But in interviews with CRN, executives at Palo Alto Networks partners said they support the strategy approach and believe it will ultimately pay off for the company and the channel.

“I have always had a respect for companies that are disrupting themselves when they’re on top,” said Cesar Enciso, founder and CEO of San Diego-based Evotek.

Arora’s platform strategy is “spot on” and builds on the vendor’s assembly of security technologies from a series of strong acquisitions in recent years, Enciso said. The Palo Alto Networks platform has thus become a unique offering in the debate over using “best-of-breed” security tools versus a “best-of-suite” platform, he said.

Palo Alto Networks can offer both “best of breed” and “best of suite,” Enciso said, so “you don't really have to choose.”

Rocky Giglio of SADA, a major cloud-focused solution and service provider now owned by Insight Enterprises, also applauded the recent strategy shift by Palo Alto Networks as a way to accelerate consolidation.

“Customers are overwhelmed by the number of security tools that are on the market,” said Giglio, director of security go-to-market and solutions at Los Angeles-based SADA. But if Palo Alto Networks can bring a “cohesive story into the security landscape,” that’s a huge win for its partners, he said.

Aside from Microsoft, few vendors can reasonably claim to be able to cover the majority of a customer’s cybersecurity needs, he noted. But Palo Alto Networks is making a strong case for offering that now, according to Giglio, and “I'm excited about it.”

‘True Platform Play’

At cybersecurity powerhouse Optiv, Chief Services Officer Jason Lewkowicz said that Palo Alto Networks is indeed becoming a rare security vendor where “you really can go all in with their platform.”

“I think they are leading in the context of having a true platform play,” said Lewkowicz, who is also an executive vice president at Denver-based Optiv, No. 24 on CRN’s 2023 Solution Provider 500. “It’s a technology platform that I believe in.”

The platform push by Palo Alto Networks is also helping to expand the vendor’s relevance within the channel.

At VirtuIT Systems, a Nanuet, N.Y.-based solution and service provider, CEO Gary McConnell said the platform efforts have gotten his attention and led to a significant expansion in the company’s work with Palo Alto Networks.

“They are integrating the entire security suite, and that’s attractive to see,” McConnell said. “That’s what drew us there.”

Longer-Term View

As disclosed in February, Palo Alto Networks is expecting to take a temporary growth hit from providing increased incentives to customers, such as free product offers, for some period of time. Doing so, according to Arora, will simply be the most effective way to accelerate adoption of more tools on its platform by customers.

“One of the hardest things to do is to change a strategy that is working,” he said in February.

The strategy, however, is partially a response to the realities that customers face while trying to move to a consolidated security platform from dependence on numerous individual tools, Arora noted. Making this shift typically means a customer is dealing with an assortment of vendors and contractual end dates, and it frequently leads to abandonment of the consolidation idea, he said.

To circumvent this, Palo Alto Networks is instead allowing customers to use its products free of charge until the customer’s contracts with its other security vendors run out.

In a LinkedIn post in February, Arora wrote that in order to “platformize” the security industry, “we felt the time is now” to make big moves. “We need to take our customers along on the journey to consolidate their vendors,” he wrote.