On March 14, Palo Alto Networks (PANW) announced it is acquiring Evident.io for $300 million cash. That is a really nice outcome for Evident.io co-founders Tim Prendergast and Justin Lundy. Congrats to both of them, as well as the rest of the Evident team.
Also, congrats to Palo Alto for acquiring a cloud strategy.
I say that a little tongue-in-cheek, but just a little. I remember like 10 years ago when cloud was first bursting on the security scene. Every interview, every VC wanted to know, “What is your cloud strategy?” For a long time I looked at many of the firewall vendors, next-gen and not, and wondered what their cloud strategy was. Yes, there were virtual firewalls they could put in front of their cloud apps, but weren’t those really web application firewalls (WAFs)?
There were some cloud-native firewall players, such as Dome9. Even they have evolved over the years beyond cloud firewall. Bigger picture, what really would the firewall players do? Checkpoint? Juniper? The rest? They have all tried to fit their square firewalls into round cloud holes. But at the end of the day, the entire network security stack has had to grapple with the question: What is their cloud story?
Evident.io, on the other hand, was a true cloud-native play. Tim and Justin took the lessons they learned at Adobe and elsewhere to develop what I always thought was one of the best cloud security solutions in the market. Yes, they were probably a little early at first, and, like many startups, went through a period of right-sizing to get the right people, but over the last 18 months or so, Evident.io seems to have hit its stride.
I am sure part of this deal is that Tim and Justin have to stay on for a while to help Palo Alto. I don’t know, but I imagine Tim will become EVP or SVP of cloud solutions or something like that. Good for both of these guys—they worked long and hard. I remember them fighting through raising money when things were getting tight and it wasn’t easy.
I imagine Palo Alto will build on the Evident product line and combine it with existing Palo Alto security to offer hybrid and “360-degree” security solutions. While $300 million cash may seem rich in terms of a multiple, in giving Palo Alto a viable cloud strategy, it’s a bargain.
The question now is, What about the rest of the firewall vendors? Yeah, they can keep selling cloud virtual firewalls, but that is really commodity. What is their real cloud strategy? For many of these who are also cash cows, the usual security R&D method, M&A is the best option. I think this could set off a bit of a buying spree for firewall and firewall management companies (look at Firemon, Tuffin, AlgoSec, Skybox) to acquire native-cloud security solutions. Rumors are already out that FireEye could be bought by Cisco.
In the meantime, someone once told me that startups are a little like owning a boat. The two best days are the day you buy (or start) it and the day you sell it. So congrats to the Evident team, and to the Palo Alto team on their new cloud strategy.