‘Our goal is to build a great security operations [service]’ that partners can manage, rather than competing with service providers on MDR, Zscaler CEO Jay Chaudhry told partners Monday.
Zscaler is seeking to build a comprehensive security operations and threat management service through its planned acquisition of MDR provider Red Canary that will produce major growth opportunities for partners, Zscaler CEO Jay Chaudhry told top partners Monday.
Chaudhry made the comments during a surprise appearance (pictured) at a partner event Monday in Las Vegas, held in connection with Zscaler’s Zenith Live 2025 conference. The Zscaler founder and CEO told partners he wanted to clarify the company’s intentions for its $675 million acquisition of Red Canary, a well-known player in MDR (managed detection and response), which was announced last week.
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For Zscaler, the deal is about gaining technology and expertise in the security operations space rather than merely becoming a player in MDR, he said.
While MDR is clearly a “piece of the business” that comes with the planned Red Canary acquisition, “our goal is to build a great security operations [service], and what we call exposure management and threat management service, [so] that our customers can directly manage it, our partners can manage it,” Chaudhry told top partners at the event. “So none of you should worry about [the acquisition] and say, ‘Zscaler is going to compete with my MDR business.’”
Ultimately, Zscaler has larger aspirations for the technology — as well as no desire to compete with the partners that it’s looking to increasingly rely upon as the vendor targets growth to $5 billion in annual recurring revenue, Chaudhry and Zscaler Channel Chief Anthony Torsiello said during the event Monday.
Chaudhry’s appearance to address partners directly about the Red Canary deal speaks volumes about his commitment and transparency toward the channel, one partner who attended the event told CRN.
Inevitably when it comes to M&A by vendors, “there are sometimes going to be some overlaps,” said Mark Grassmann, national cybersecurity practice principal at Alchemy Technology Group, a Houston-based partner of both Zscaler and Red Canary. In cases like this, though, “that’s just a continuation of the value-add both for the manufacturer and solution providers, systems integrators and other channel partners.”
The key for both vendors and partners is “to be honest and forthright and truly realize that you need each other,” Grassman said. “Because we need everybody to help our customers in their challenges.”
And given Red Canary’s track record and technological advantages, Chaudhry’s remarks also showcased that partners in fact have much to gain in the planned combination with Zscaler, he said.
Speaking to partners, Chaudhry said that Red Canary brings a number of key differentiators compared to other vendors that were considered by Zscaler during the M&A process.
“First we [reviewed] traditional security operations companies who are a meaningful size,” he said. “What we found was, the technology was so outdated, you just couldn’t get excited about it. And we don’t like to buy old technology. We don’t want to buy revenue. We want good, disruptive technologies.”
Zscaler also explored several dozen newer companies focused on AI and agentic technologies, but most of the startups were unproven with either no customers or very few, Chaudhry said.
Red Canary, on the other hand, has 12 years of experience working with major customers in MDR as well as impressive capabilities around AI agents, he said. The “agentic technology they had blew us away,” Chaudhry said.
Upon closure of the acquisition — which is expected in August — Zscaler plans to integrate the Red Canary technology with functionality from its acquisition of “security data fabric” provider Avalor in March 2024.
“If we combine [Red Canary’s] technology with our data fabric, we could offer an amazing solution for security operations,” Chaudhry said.
