The cybersecurity giant and CEO Nikesh Arora have continued doubling down on their bold ’platformization’ strategy, which has reverberated around the industry since it was introduced two years ago.
During Palo Alto Networks’ quarterly call with analysts earlier this week, CEO Nikesh Arora marked the two-year anniversary of the cybersecurity giant’s bold strategy shift with a reminder to the rest of the industry: That “platformization” concept you all love to talk about now? That was our idea.
Arora, of course, didn’t put it exactly that way.
[Related: Palo Alto Networks Completes $25B Acquisition Of CyberArk For Identity Security Push]
Rather, after disclosing the latest figures for new customers that have “platformized” with Palo Alto Networks—i.e., consolidated a number of tools on the vendor’s broad platform—he suggested that the vendor’s momentum “isn’t accidental” in this regard.
“It’s a result of a deliberate, flywheel motion we built,” Arora said. “When we committed to our platformization strategy years ago, we were betting [on] the shift that has now become an industry standard.”
From my vantage point, there is no major exaggeration here in Arora’s comment.
In truth, it really was a big bet at the time for Arora and Co.: The initial announcement of the platformization strategy in February 2024 sank the company’s share price in the immediate aftermath. The fear was that it would hurt the vendor’s growth, since the company would be giving out free product offers as an incentive to consolidate.
As for the notion that platformization is now an “industry standard,” well, that checks out too. The term has long ceased to be specific just to Palo Alto Networks and is routinely deployed by executives I speak with from vendors in a wide range of security segments.
Still, none of those other vendors have as comprehensive of a platform as does Palo Alto Networks. This is particularly true in the wake of the vendor’s latest M&A spree, led by its expansion into identity security with the $25 billion acquisition of CyberArk.
I have often wondered how a midtier security vendor can admit that “platformization” is in fact the best strategy, without tacitly acknowledging that the vendors with the broadest platforms—Palo Alto Networks of course, but also CrowdStrike, Microsoft and others—have an advantage over them?
A few savvy security CEOs have addressed this up front by finding a way to talk about platforms without inadvertently plugging Palo Alto Networks.
Netskope CEO Sanjay Beri, for instance, told me in October that there’s no question the company is making a platform play—but at the same time, that Netskope has no illusions about becoming the one-platform-to-rule-them-all.
“I don’t believe that people want one platform,” Beri told me at the time. “They don’t want 100—but they don’t want [just] one. Instead, they want a few core platforms. We will always aspire to be [one of those platforms].”
Given that Beri was speaking in the wake of Netskope’s successful IPO, this certainly seems like a sound strategy—at least for everyone who isn’t Palo Alto Networks.
