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Palo Alto Networks Acquiring Aporeto for Micro-Segmentation Security

Dimitri Stiliadis
Aporeto CTO Dimitri Stiliadis

Palo Alto Networks is acquiring Aporeto, a provider of zero trust cloud security, application identity and distributed firewall services. Aporeto's software provides micro-segmentation security services that safeguard on-premises and public cloud applications. Palo Alto expects to close the $150 million acquisition in the company's fiscal second quarter.

Aporeto in January 2019 raised $20 million in Series B funding led by Comcast Ventures. The company closed 2018 with "record revenue growth and customer wins across multiple key verticals, including financial services, healthcare, insurance, high-tech and government" -- though actual revenue figures were not disclosed.

Early Aporeto partners include Synnex (the distributor) and Fishtech Group (a next-generation MSSP and cybersecurity startup).

Under terms of the buyout, Aporeto co-founders Dimitri Stiliadis and Satyam Sinha have agreed to join Palo Alto Networks. Additional M&A headcount figures were not disclosed.

Palo Alto Networks Acquiring Aporeto: Executive Perspectives

Palo Alto Networks CEO Nikesh Arora

In a prepared statement about the Aporeto acquisition, Palo Alto Networks Chairman and CEO Nikesh Arora said:

"We are thrilled to welcome Aporeto to the Palo Alto Networks family. We believe the addition of Aporeto's unique machine identity technology will further enhance our leading Prisma Cloud capabilities and strengthen our commitment to helping customers secure their journey to the cloud."

Added Aporeto Co-founder and CTO Dimitri Stiliadis:

"We have dedicated ourselves to helping organizations securely embrace the cloud. Teaming up with Palo Alto Networks allows us to bring our machine identity-based microsegmentation technology to a large customer base. We are thrilled to join forces to help customers secure their journey to the cloud."

Palo Alto Networks: Security Acquisitions Continue

Palo Alto Networks has been extremely busy on the merger and acquisition (M&A) front. The company's recent acquisitions include:

  • Zingbox for Internet of Things (IoT) cybersecurity;
  • Twistlock for cloud container & VM cybersecurity;
  • Demisto for Security Orchestration, Automation and Response (SOAR) software;
  • Redlock for cloud security, compliance & risk management; and
  • Secdo for endpoint detection and response (EDR).

Backed by the M&A deals and organic growth, Palo Alto Networks' business continues to expand -- though some Wall Street analysts want even faster expansion.

For the company's first quarter of fiscal 2020:

  • Total revenue grew 18 percent year over year to $771.9 million; and
  • GAAP net loss was $59.6 million, compared with GAAP net loss of $38.3 million.

The figures generally exceeded Wall Street's expectations, but shares dropped about 7 percent in after-hours trading amid concerns about potential slowing growth rates.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.