A reported by CNBC- As part of a larger alliance, Palo Alto Network is purchasing cloud security software assets from IBM, which will provide the cybersecurity startup with access to additional advisors and a larger customer base.
The firms announced in a joint press statement that Palo Alto is moving its current clientele to its security platform, Cortex Xsiam, and that it is purchasing IBM’s QRadar cloud software for an unknown amount. The CEO of Palo Alto, Nikesh Arora, told CNBC that the transfer typically takes one to three months. Additionally, IBM will provide Palo Alto product training to over a thousand of its consulting staff members.
Earlier on Wednesday, two other companies in the SIEM market, Exabeam and Thoma Bravo’s LogRhythm, announced plans to merge.
Arora said his company needs to be better prepared to go up against Splunk.
“Clearly, it’s just a hotbed of activity in the consolidation in cybersecurity,” Arora said.
Starting a few months ago, Palo Alto and IBM have been collaborating more closely, and according to Arora, he has been discussing future directions for the alliance with Arvind Krishna, CEO of IBM. Yet they both made software for SIEMs.
Arora remarked, “We tended to get caught there.”
According to Krishna, IBM was not pressured to make its arrangements with Palo Alto because of the Splunk transaction.
Krishna remarked, “I don’t think we really compete with most things in Cisco’s portfolio.”
IBM announced in December that its consultancy department would provide clients with access to Palo Alto’s rival Cortex Xsiam software. IBM will now use Prisma Sase 3.0 from Palo Alto in addition to Cortex Xsiam. In addition to using Google models in Cortex Xsiam, Palo Alto will also use IBM Watsonx big language models.
Although Palo Alto only began Cortex Xsiam two years ago, the SIEM category has been around for over two decades. With over $90 million in bookings in the most recent quarter, it has quickly acquired traction. According to Arora, the company has been stealing market share from “everyone.”
IBM may be able to meet its stated target of mid-single-digit revenue growth in 2024 if it has a more comprehensive portfolio of modern security tools for consulting. Revenue rose by 3% in the first quarter, driven by a 2% growth in the consultancy sector.
IBM is not growing nearly as quickly as Palo Alto. Revenue rose 19% in the quarter ending in January. On Monday, the business will release its latest quarter’s results.
Palo Alto more than doubled in value last year and its stock is up 6% year to date, lifting the company’s market cap past $100 billion. The stock rose more than 1% in extended trading. IBM is up close to 5% this year and is now valued at $154 billion.
The companies said the transaction should close by the end of September, subject to regulatory approval and other conditions.
“I expect that we are going to grow significant consulting business on Palo Alto’s products, much like I have with Azure and AWS,” Krishna said in an interview. IBM helps organizations run their software on the Amazon and Microsoft public clouds. He said he hopes to quickly be generating hundreds of millions of dollars in new consulting revenue.
Palo Alto’s market capitalization has surpassed $100 billion as a result of the stock’s 6% annual growth and more than doubling in value over the previous year. Over 1% of the stock increased during extended trading. With an almost 5% gain this year, IBM is presently valued at $154 billion.
According to the companies, the deal should close by the end of September, pending regulatory clearance and other requirements.
“Like I have with Azure and AWS, I anticipate that we will grow a sizable consulting business on Palo Alto’s products,” Krishna stated in an interview. IBM assists businesses in using the public clouds from Microsoft and Amazon to run their software. He expressed his goal to start bringing in hundreds of millions of dollars from new consulting gigs very soon.
According to Krishna, IBM will keep offering its QRadar software for usage in on-site data centres.
It’s been here for decades, he remarked.
According to Krishna, IBM would advise customers who are now using it to think about moving to Palo Alto’s Cortex Xsiam.
