10 Hot Cybersecurity Companies To Watch In 2020
Many of the industry's fastest-growing vendors will have their hands full in 2020 integrating major acquisitions, completing their first year as a publicly-traded company, or rolling out new partner programs and technical capabilities.
Leading The Way
Many of the industry's fastest-growing vendors will have their hands full in 2020 integrating major acquisitions, completing their first year as a publicly-traded company, or expanding their technical capabilities into new fields within cybersecurity.
All of the companies appearing on the list achieved at least 15 percent growth in their top-line revenue, headcount and stock price during 2019, according to the U.S. Securities and Exchange Commission (SEC) as well as LinkedIn. CrowdStrike experienced the most growth in top-line revenue and headcount in 2019, while Okta and Rapid7 had the most success with boosting their stock price.
The coming year will provide Palo Alto Networks, Proofpoint and Fortinet with an opportunity to integrate a slew of recent acquisition, Cloudflare and CrowdStrike time to adjust to life as a publicly-traded company, and CyberArk and Mimecast a chance to deepen their ties to the channel with new programs and personnel.
Here's a look at 10 hot cybersecurity companies solution providers should be watching in 2020.
Get more of CRN's 2019 tech year in review.
Cloudflare captured the market’s attention in 2019 with a massive New York Stock Exchange initial public offering that raised $525 million on a valuation of $4.4 billion. The IPO came just six months after Cloudflare raised $150 million in a Series E round led by Franklin Templeton to support its growth, extend its product ranges and continue international expansion into new markets.
All this capital has made it possible for Cloudflare to go after more customers, with the San Francisco-based security and performance services vendor growing revenue by 48 percent in the first nine months of 2019 to $203 million. Cloudflare also used the cash to boost its headcount by 45 percent over 2019 to 1,275 people, with the most aggressive hiring coming in the sales and business development spaces.
Cloudflare has also redoubled its efforts around the channel, rolling out a more robust and structured partner program that extend beyond enterprise resellers, referral partners OEM partners to include service providers that want to develop practices around Cloudflare solutions such as SIs, MSPs, and MSSPs. The program now offers multiple tiers for referral, revenue-generating and OEM partners.
CrowdStrike’s $6.6 billion valuation following a $612 million Nasdaq initial public offering in 2019 was an all-time record in the cybersecurity space, besting both Palo Alto Networks’ 2012 IPO as well as Cloudflare’s IPO later in 2019. The Sunnyvale, Calif.-based endpoint security vendor today enjoys a market cap of nearly $10 billion after increasing its stock price by more than 40 percent since the IPO.
The company said in its IPO filing that a "vast majority" of its Falcon platform sales flow through channel partners, and tightened its bond with solution providers through a new three-tiered program that provides market development funds and generous discounts for partners at the higher levels. Resellers were for the first time required to hold a certain number of accreditations to advance in the program.
From a product perspective, CrowdStrike teamed up with Dell and Secureworks on a joint offering targeted at mid-market customers, state and local governments, and educational institutions that lack their own SIEM platform and SOC. The company also rolled out capabilities that streamline vulnerability management, facilitate metered billing on AWS, and simplify the management of Windows firewalls.
CyberArk in 2019 revised its partner program tiers to focus solely on certifications and unveiled new training modules to help solution providers deliver pre-sales support. The Newton, Mass.-based privileged account management vendor’s 400 channel partners were sorted into three tiers based solely on the number of certified employees they have in sales, pre-sales and delivery engineering.
More than 65 percent of CyberArk's business flows through the channel today, with pretty much all of the company's newer customers embracing an indirect sales motion regardless of their size. A tighter relationship with the channel has fueled a nearly 30 percent increase in year-over-year revenue for CyberArk in the first three quarters of 2019 to $304 million.
Wall Street loves what it’s seen from CyberArk in 2019, with the company’s stock price for the year catapulting up 61.2 percent to $117.22 per share on a valuation of $4.44 billion. CyberArk has also increased its headcount by 17 percent over the past year to 1,355 people, with the most aggressive hiring occurring in the engineering and business development departments.
Fortinet broke into emerging cybersecurity sectors in 2019 with opportunistic acquisitions, purchasing enSilo for $20 million to strengthen its real-time automated detection and response capabilities around endpoint and edge data, and buying CyberSponse for $28 million to make security operations teams more efficient and bolster incident response.
The Sunnyvale, Calif.-based platform security vendor also spent much of the year working on a new partner program that will be customized to more fully support solution providers based on the market segment they're selling into. Fortinet will also fuse its North American and international programs into a single global program will better synchronize benefits and align discounts across different regions.
From a product standpoint, Fortinet Secure SD-Branch extends the benefits of SD-WAN to network access, converging WAN and security to increase visibility, reduce complexity, improve performance, and lower overall IT costs. And the new FortiCloud Services give partners and customers cloud security and management capabilities that are easy to implement, easy to manage, flexible, and scalable.
Mimecast scored a major channel coup in 2019 when it landed Blue Coat Systems, Websense and McAfee channel veteran Kurt Mills to help the company move upmarket and pursue larger accounts. The Lexington, Mass.-based email security vendor tasked Mills with putting a systematic approach in place covering everything from training and technical support to marketing and vendor partnerships.
The company expanded its technical portfolio in 2019 through a pair of acquisitions, buying data migration technology provider Simply Migrate to help customers and prospects move to the cloud more quickly, reliably and inexpensively. Mimecast also purchased email security startup DMARC Analyzer to reduce the time, effort and cost associated with stopping domain spoofing attacks.
Wall Street has rewarded Mimecast for these investments, sending the company’s stock price up by 33.4 percent in 2019 to $43.89 per share on a valuation of $2.72 billion. The company’s offerings have also gained more traction with the market, with year-over-year sales catapulting by 28 percent in the first half of the company’s 2020 fiscal year to $203 million.
Okta has expanded its portfolio over the course of 2019, debuting Okta Advanced Server Access in a first-ever attempt to extend its identity capabilities from SaaS and custom applications down the stack to infrastructure. Plus Okta DynamicScale will make it easier for large organizations to authenticate the traffic generated by immersive digital experiences through a single product rather than one-off services.
The San Francisco-based company also entered the workflow automation market with its $52.5 million acquisition of Azuqua, which will enable customers to automate more of their business processes and connect to more apps. Wall Street views Okta’s strategy very favorably, with the company’s stock price skyrocketing by 86.7 percent in 2019 to $118.80 per share on a monster valuation of $14.4 billion.
All these new capabilities have drawn new customers to Okta, with the company growing year-over-year revenue by 48 percent in the first nine months of fiscal 2019 to nearly $420 million. And Okta has aggressively beefed up its staffing to support continued innovation, with year-over-year headcount growing by 36 percent to 2,491 people driven by aggressive hiring in the sales and engineering arenas.
Palo Alto Networks
The world’s largest pure-play cybersecurity vendor spent nearly $1.25 billion in 2019 on five strategic acquisitions to make sure it remains that way. The Santa Clara, Calif.-based platform security giant kicked off its acquisition spree with the $560 million buy of Demisto to better leverage artificial intelligence and machine learning to automate large parts of customers' security operations.
Then came the $410 million purchase of rising container security star Twistlock and $47 million buy of early-stage serverless security startup PureSec to help firms secure modern applications throughout their entire lifecycle. After that, Palo Alto Networks became the only vendor capable of delivering IoT security as an integrated service through the firewall following its $75 million buy of Zingbox.
And finally, Palo Alto Networks spent $150 million to buy cloud-based microsegmentation provider Aporeto that leverages machine learning to move away from the legacy approach of IP addressing. The company also launched the Prisma business unit in 2019 to give customers what they need to consistently govern access, protect data, and secure applications in the cloud.
Proofpoint spent nearly $350 million on a pair of acquisitions in 2019 that are aimed at making the company stickier with partners and customers alike. The Sunnyvale, Calif.-based cybersecurity vendor first agreed to pay $120 million to acquire network access vendor Meta Networks to help customers better protect people, applications and data as they move beyond the traditional perimeter.
Then later in 2019, Proofpoint acquired insider threat management platform provider ObserveIT for $225 million to better protect data across email, cloud, and the endpoint. The deal is expected to give enterprises unique insights into user activity by combining Proofpoint’s information classification, threat detection, and intelligence with ObserveIT’s endpoint agent and data risk analytics.
Wall Street rewarded Proofpoint’s continued push beyond email security by driving the company’s stock price up by more than 40 percent in 2019 to $115.28 per share. These new capabilities have also made Proofpoint more appealing to customers, with year-over-year sales growing by more than 24 percent in the first nine months of 2019 to nearly $645 million.
Rapid7 bought NetFort for $16.1 million in 2019 to improve its ability to detect attacks, investigate incidents and gain more visibility into devices that pose a risk to organizations. Galway, Ireland-based NetFort provides end-to-end network monitoring, traffic visibility and analytics capabilities across cloud, virtual and physical networks.
The Boston-based company’s InsightIDR incident detection and response tool identifies unauthorized access from external and internal threats, highlighting suspicious activity so that companies don’t have to weed through thousands of data streams. Wall Street has been pleased with Rapid7’s vision, sending the company’s stock 84.7 percent higher in 2019 to $57.03 per share on a valuation of $2.82 billion.
Customers have also been impressed with the breadth of Rapid7’s capabilities, driving an annual sales increase of 34 percent in the first nine months of 2019 to more than $235 million. And the company has invested in new employees to support all this growth, increasing headcount by 21 percent over the past year to 1,631 people, with aggressive hiring coming in the support, sales, and engineering functions.
Zscaler forged ahead into the browser isolation space with the $13 million acquisition of Appsulate to provide users with secure access to web-based applications and content by rendering safe pixels to the browser, protecting corporate endpoints from security concerns. Browser isolation is especially suited for security sensitive verticals such as financial services and defense, according to Zscaler.
Specifically, San Jose, Calif.-based cloud security startup Zscaler said Appsulate’s technology is highly effective for use cases where the internet or application content should not be downloaded to the end point due to security or data protection concerns. As a result of investments like these, Zscaler’s year-over-year revenue for the 2019 fiscal year jumped by nearly 60 percent to more than $300 million.
The dramatic sales growth has been fueled by Zscaler’s investment in personnel, with the company increasing its headcount by 31 percent to 1,697 people driven by robust hiring around support, sales, engineering and IT. Investors have also looked favorably at Zscaler’s moves, boosting the company’s stock by 21 percent during 2019 to $47.73 per share on a valuation of $6.11 billion.