Are we seeing a Cyber-race for critical mass against the big CSPs (MS Azure, AWS, GCP)?

A quick ad hoc wrap-up of my thoughts on the big acquisitions this week

I think we are. When you look at the strategy of the CSPs (Microsoft in particular) you can see an approach geared towards creating cloud-native security ecosystems. This builds on their mission to grow market share through competitive feature parity, smart-bundles and innovation. Microsoft, in particular, utilise smart bundles (the E5 suite) to appeal to CIO’s inherent motivation to consolidate vendors, gain efficiencies through interoperability and 'good where important, good enough for everything else'. Moreover, CISOs are starting to reconsider the mishmash of point solutions and the challenges of operationalising technologies that overlap or provide niche capability in isolation. This strategy has been successful, and I believe it's what's driving their competitor’s strategies’, especially in the latest round of acquisitions. I believe there is now a race for the critical mass to compete for Enterprise market share, and rationalise a specialist option providing scale and interoperability to justify a non-CSP-centric approach. Cisco, Palo Alto and CrowdStrike are leading the charge, taking advantage of vendors who’ve been rattled since the demise of SVB and the subsequent step-change in PE (“they want us to make money now?!?”). It doesn’t seem to have impacted valuations for more established brands though (as evident in the latest raft).

What’s happening now?

Cisco appear to be building a Cybersecurity ecosystem, with the late swerve in not acquiring SentinelOne (showing intent to augment XDR capability) and the successful buy-out of Splunk. Combined with other security products, if you’re a big Cisco house, this could be compelling (if they manage to integrate successfully).Palo Alto, acquired Cider Security (Appsec platform) at the end of 2022 and now Talon Security (secure Web Browser) have a compelling portfolio, with significant integration. They’ll need to play to compliance drivers and technical communities to succeed in the AppSec space though. It’ll be interesting to see how these technologies fit, and how well the portfolio jigsaw resonates.CrowdStrike recently acquired Bionic, providing ASPM capabilities. Humio and Reposify were also smart buys. Crowdstrike has been a little more targeted, as their focus appears to be on offloading operationalised security burden. They need to think bigger than just an MDR play longer term and Bionic could be an interesting segway to operationalising *SPM technologies for managed services.

What’s next?

I think we’ll see a continuation of point solutions being hoovered up by CSPs and the pure-play big-guns. The strategy to create a cybersecurity offering that is substantial enough to justify Enterprises leveraging a non-CSP primary security vendor seems rational and attainable. THERE CAN BE ONLY ONE (small group of Enterprise security vendors in 10yrs?)!