Palo Alto Networks CEO: We Will Be The Biggest Security Company By 2017 (Or Sooner)

The numbers show it -- Palo Alto Networks is on a high-growth run-rate, one that has the security company on a trajectory to outpace the competition by 2017, CEO Mark McLaughlin said.

"We have a hell of a shot ... to be the biggest company in this space in the not-too-distant future," McLaughlin said in front of an audience of top partners and sales leaders at the company's Sales Kick Off event in Las Vegas.

To prove his point, McLaughlin highlighted an impressive year of sales for the company, including a $1 billion revenue run-rate and billings growth of greater than 50 percent year over year so far this fiscal year.

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"We're not even close to being done," McLaughlin said, setting a target for the company to hit $2 billion in revenue in the next two years. "We're not resting because we're on track to double the size of this company by the end of fiscal year '17 organically."

Partners also saw incredible growth with the vendor, with 481 partners expanding more than 100 percent year over year.

"It's been a very good partnership for us. They've really become probably our top two growth engines right now [overall]," Gary Miglicco, senior vice president of security at Herndon, Va.-based ePlus, said. Palo Alto Networks has grown more than 300 percent year over year in the ePlus portfolio, he said. "We've seen a lot of growth with them."

That growth overall, combined with disruptive innovation and an unwavering commitment to the channel, is what is attractive to big-name security partners like Optiv (formerly Accuvant and FishNet Security), Executive Vice President for Partner Strategy Dan Wilson said.

"By necessity [in security], we've needed to stay more agile and shift towards those more disruptive technologies. It's really nice that we have a company that was one of the upstarts ... and now it's a massive organization with a lot of business together with us, and they continue to do a lot of disruptive things and innovate," Wilson said, adding that that is not necessarily true for some of Palo Alto Networks' large traditional competitors.

Optiv was named Americas Partner of the Year at the event. Wilson said Optiv's Palo Alto Networks business grew 63 percent this year, making it the company's biggest partner.

"Palo Alto is growing very quickly. Optiv is growing very quickly, and the pace of growth for Optiv's business with Palo Alto is greater than either one of those," Wilson said.

Those kind of growth numbers translate into a shift in security market share, McLaughlin said. Wall Street estimates predict that Palo Alto Networks will grow 35 percent year over year, he said, with competitors such as Cisco, Check Point and Fortinet holding steady.

Even with those conservative estimates, which McLaughlin said was a "big favor" to competitors, Palo Alto Networks is on the trajectory to be the largest security vendor by the end of fiscal year 2017. If the company grows at 55 percent, as it did in its most recent quarterly earnings, it could be the largest security vendor by the end of the first quarter next year.

That leadership role holds a lot of weight, McLaughlin said, as the world walks a fine line between a "functional digital society and chaos," with security companies standing in the middle.

"It's an important time for us," McLaughlin said. "We're doing things that are historic. Right now. And we are remaking history."

One thing that is clear in this new digital age, Palo Alto Networks executives all said, is that legacy point technologies just don't cut it anymore, and platform security is the way of the future. That is causing vendor competitors like Cisco and Check Point to be "on the way down," Mark Anderson, senior vice president of worldwide field operations, said at the event.

"It's never been more evident that legacy technology doesn’t work," Anderson said.

However, while McLaughlin said he believes Palo Alto Networks has a huge market opportunity ahead, it is critical that the company takes nothing for granted.

"We have an opportunity and it is ours to lose and it is ours to earn," McLaughlin said.

To do that, McLaughlin said Palo Alto Networks will need to do several things: focus on flawless execution; have total teamwork; be flexible to see what security technology is coming next; maintain humility; focus on the customer; gain leverage with channel and vendor partnerships; and continue to drive the momentum from its current success toward the future.

"This is going to last decades and it's early," McLaughlin said. "Security is here to stay for a very, very long time, which means our opportunity as a company is primarily and substantially all in front of us, not behind us."

PUBLISHED AUG. 19, 2015