A steadily rising need for cybersecurity solutions is the reason Palo Alto Networks Inc. (NYSE:PANW) growth metrics and long term prospects remain bullish. The COVID-19 shocks have changed the business landscape and created new security challenges, conversely fuelling demand for cybersecurity solutions.
Palo Alto Networks Opportunities
Talk of a coronavirus vaccine is not expected to alter Palo Alto Networks' prospects and opportunities in any way. The pandemic has changed the way businesses and companies operate, with most of them making a permanent shift online and into the cloud.
Increased reliance on protecting enterprise data has all but created new opportunities that the cybersecurity firm is making good use of as a big player in the sector. As hackers and robots attempt to steal corporate, enterprise, and consumer data, Palo Alto Networks remains well-positioned to ink deals to offer protection solutions.
Likewise, the company is making a big switch from lower margin physical firewall products to subscription-based cloud protection solutions. The cloud subscription models generate higher margins and yield more consistent revenues.
Acquisition Drive
In addition to unveiling new cybersecurity products, Palo Alto Networks has also embarked on an acquisition drive as it seeks to strengthen its competitive edge as well as an array of cybersecurity products. The company has already inked an $800 million deal to acquire Expanse.
With the acquisition, Palo Alto Networks gains access to an array of products and services that help companies understand and protect their attack surfaces. Expanse service offers security teams an overview of how a company’s security profile would look like from an attacker’s perspective.
Expanse boasts of the likes of Paypal Holdings Inc. NASDAQ: PYPL and CVS Health Corp NYSE: CVS as clients that Palo Alto Networks will now be able to service. The acquisition is also expected to diversify Palo Alto Networks away from the core firewall and into more next-generation security solutions.
The acquisition comes barely a year after Palo Alto Networks completed the acquisition of Demistof for $550 million. With the acquisition, the company gained access to products that analyze firewall data as well as endpoint data, therefore enabling the detection of malware on laptops, mobile phones, and other devices.