The Future of Zscaler M&A and Managed Security

Zscaler's acquisition of Edgewise Networks in 2020 marked a significant expansion of its Zero Trust capabilities, adding advanced segmentation and isolation features to its platform.

This move highlights Zscaler's focus on evolving its security solutions to meet the changing needs of its customers.

Zscaler's managed security services have seen rapid growth, with the company reporting a 50% increase in managed security customers in 2022.

This growth is driven by the increasing demand for cloud-based security solutions that can scale with businesses.

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With Zscaler, you can remove significant technical debt and complexities, allowing you to move on to value capture activities more quickly.

By using Zscaler, you can minimize threat exposure from acquired entities on Day 1, safeguarding against cyberthreats while you integrate in parallel.

Zscaler's zero trust cloud platform enables you to complete a higher rate of integrations or separations quickly and efficiently.

Less than 10% of deals globally complete a cyber security due diligence before completing a deal, leaving companies to manage risks such as unknown inventory, potential compromised assets, and providing 3rd party access.

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70% of deals fail to achieve the intended value advantage due directly, or in part, to the risk of achieving deal synergies that are often plagued by cyber risk and low-value tech integration timelines.

Here are some of the key benefits of using Zscaler for M&A:

Zscaler's simplicity gets integrations done in far less time, with little user disruption, lower cost, and reduced risk.

Traditional integration methods often involve extending your perimeter network via temporary VPNs, which increase your attack surface. This can result in partially integrated businesses with complex patchwork systems containing security blind-spots and vulnerabilities.

A significant percentage of deals fail to achieve the intended value advantage due directly or in part to cyber risk and low-value tech integration timelines. This is because less than 10% of deals globally complete a cybersecurity due diligence before completing a deal.

To mitigate these risks, a Zero Trust approach can eliminate 80% of the cyber risks during an M&A. This approach provides the ability to eliminate 80% of the cyber risks during an M&A as you are never on the network and can now quickly identify, analyze, and mitigate cyberthreats before they break through your defenses.

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The Zscaler platform enables IT/Security operations to securely connect any device, application, or user no matter where they work, travel to, or connect from. This can be achieved quickly, with the platform fully operational in days.

Here are some key benefits of using a Zero Trust approach for M&A integration:

Zscaler's zero trust cloud platform enables IT/Security operations to securely connect any device, application, or user no matter where they work, travel to, or connect from.

The platform is fully operational in days, allowing organizations to quickly identify, analyze, and mitigate cyberthreats before they break through their defenses.

Traditional integration involves extending your perimeter network via temporary VPNs, which increase your attack surface, and backhauling traffic to a few data centers, making things slow and impacting user productivity efforts.

Zscaler's Zero Trust approach eliminates 80% of the cyber risks during an M&A, as you are never on the network.

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To achieve this, Zscaler provides a simple-to-operate, scalable cloud platform that protects the enterprise from known and evolving cyber threats and insider risk.

The platform removes barriers to action, allowing organizations to value-capture synergies sooner, and enables IT/Security operations to securely connect any device, application, or user.

Here are some of the benefits of using Zscaler for M&A integration:

The future of M&A looks bright for Zscaler, with a focus on expanding its cloud-native security platform through strategic acquisitions.

Zscaler has already made significant strides in this area, acquiring several companies to enhance its capabilities and strengthen its position in the market.

One notable example is the acquisition of Edgewise Technologies, a network segmentation company that helps organizations protect their networks from cyber threats.

This acquisition demonstrates Zscaler's commitment to innovation and its willingness to invest in cutting-edge technology to stay ahead of the competition.

AI is transforming the security industry, shifting focus from point tools to integrated, AI-managed platforms.

The acquisition of Red Canary by Zscaler is a prime example of this shift, solving the problem of requiring significant human labor to operationalize Zscaler's alerting systems.

Red Canary's platform interprets telemetry, enriches alerts, and responds with automation, making it a natural fit for Zscaler's needs.

This acquisition gives Zscaler a clearer path to upsell, allowing customers to reduce internal SOC headcount and pay Zscaler for both technology and service.

AI and automation can free up cybersecurity talent to do more meaningful work, addressing the existing shortage of cybersecurity professionals.

Red Canary's repositioning as a broader MDR has been a tough spot to be in, with Expel and Arctic Wolf dominating specific use cases.

The acquisition gives Red Canary distribution, infrastructure, and a future, making it a win-win situation for both companies.

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As companies navigate the complex world of mergers and acquisitions (M&A), having a clear roadmap is crucial for success. A well-defined technology roadmap can help you integrate acquired companies quickly and securely.

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One key aspect of an effective M&A roadmap is providing cross-entity access without the need for network connections or IP overlap. This can be achieved with a zero IT footprint architecture, as seen in the implementation by Cushman & Wakefield.

Removing external exposures is also essential to minimize risk, and can be done by overlaying access to private apps and learning about app/user inventories and interactions. This approach was adopted by Guaranteed Rate to quickly integrate companies early in the process.

Data protection is another critical component of an M&A roadmap. Zscaler's technology provides data protections to ensure crown jewel IP never leaves your control, giving you peace of mind during the integration process.

To further enhance security, integrating risk profiling capabilities and adopting data protection tools such as CASB and DLP can provide dynamic risk-based policy. This can be seen in the implementation by Brink's, where Zscaler allowed them to quickly integrate companies early in the process.

By following a structured M&A roadmap, you can ensure a smooth and secure integration process, setting your company up for long-term success.

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No acquisition is risk-free, and the Zscaler-Red Canary deal is no exception.

Integration failure is a major concern, as Red Canary's MDR needs to be tightly coupled with Zscaler telemetry, and a clunky product experience or misaligned GTM could lead to customer apathy.

Cultural mismatch or GTM friction could also occur, as Zscaler will need to integrate the Red Canary team without diluting its value or alienating existing customers.

Security teams may resist the change, as moving from an internal SOC to MDR means trusting a third party with detection and response, a shift that's not trivial.

Security leaders may be unwilling to reduce their staff, so they might be unwilling to spend more on a platform that could result in personnel changes.

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