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IoT Security Acquisition: Palo Alto Networks Buys Zingbox

Palo Alto Networks is acquiring IoT (Internet of Things) security specialist Zingbox for roughly $75 million.

Zingbox develops a cloud-based service for IoT device security and threat identification. Moreover, the company in June 2019 delivered IoT Command Center for the discovery, security and management of IoT devices. That platform also supports real-time operational metrics such as device utilization.

Those capabilities will integrate with Palo Alto Networks’ Next-Generation Firewall and Cortex platforms. Zingbox co-founders Xu ZouMay Wang, and Jianlin Zeng will join Palo Alto Networks.

Zingbox IoT Security: Company History

ZingBox in 2017 raised $22 million in a Series B funding led by Dell Technologies Capital and Triventures. At the time, the company said the IoT platform packs machine learning to discover and assess risk; baseline normal behavior; detect anomalous activities and provide real-time remediation across an organization’s entire IoT footprint.

Early adopters included numerous healthcare organizations seeking to manage medical equipment and healthcare devices. Key partners include SoftBank C&S, which introduced ZingBox to the Japanese market and beyond.

We’re checking to see if Zingbox has a formal channel partner program, and whether the platform is multi-tenant for MSPs and MSSPs.

Palo Alto Networks: Business Performance and Acquisitions

Palo Alto Networks CEO Nikesh Arora

Palo Alto Networks has evolved since Google veteran Nikesh Arora joined the company as CEO in June 2018. The evolution involves some sales team executive churn, along with multiple acquisitions designed to fuel growth.

Recent acquisitions, in addition to Zingbox, include:

  • Twistlock, an Israel-based cybersecurity startup that protects container, serverless and public cloud systems.
  • Demisto, a SOAR platform that MSSPs can leverage.

Palo Alto Networks has also ramped up its MSSP-centric partner program. Armor and RestorePoint are recent companies to officially join the Palo Alto Networks RedLock MSSP partner program.

Palo Alto Networks: Growth Update

Amid all those moves, Palo Alto’s latest financial results exceeded Wall Street’s expectations. During a few hours on Wednesday, the company’ financial forecast disappointed investors — but an earnings call later in the day largely restored Wall Street’s faith in the company’s long-term forecast.

Among the takeaways:

  • revenue for the fiscal fourth quarter 2019 grew 22 percent year over year to $805.8 million, compared with total revenue of $658.5 million for the fiscal fourth quarter 2018.
  • GAAP net loss for the fiscal fourth quarter 2019 was $20.8 million, compared with GAAP net income of $7.0 million for the fiscal fourth quarter 2018.

Meanwhile, rivals continue to make strategic moves. SonicWall expanded its R&D since spinning off from Dell Technologies in November 2016. Barracuda Networks has successfully pushed deep into the MSP partner market with email and data protection solutions. Fortinet pioneered the MSSP partner model. And CheckPoint unveiled a new global partner program for solutions providers in February 2019.

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