Big Tech Security Provider Could Be a Winner
In a nutshell Zscaler is a cybersecurity specialist that removes the attack surface cyberattackers use to get into cloud networks by rendering cloud-based software invisible to the internet. By linking customers directly to applications rather than the whole network, the cybersecurity platform prevents successful hacks from spreading to other parts of the network and causing significant issues. Zscaler prevents the theft and compromise of critical company data by continually checking and evaluating every material, independent of previous security clearance. Zscaler's Zero Trust exchange makes it possible for enterprises to connect from any location without increasing their risk of cyberattacks.
A higher level of cybersecurity alertness is being called for by a number of technical advances. Cloud-based software-as-a-service systems that demand ongoing connection are becoming more popular among businesses. With the rise of the "work anywhere, work from anywhere" model, firms must ensure that workers may securely connect to their networks from a distance without jeopardising their data's security. As cloud infrastructure services like as Amazon Web Services and Microsoft Azure become more popular, so does the need for secure app-to-app communication in the cloud, as well as the ability to monitor off-site assets through the Internet of Things and 5G networks.
Three and a half years ago, the business had just over 100 data centres across six continents. As well as seeing an increase in critical indicators, it now processes over 240 million transactions every day, and provides more than 200,000 security updates every single day.
The capacity of Zscaler to maintain its growth rates has been the most astounding of all. Zscaler's revenue increased by 51% from the previous year in fiscal 2018. This year the company's revenue will be $673 million, an increase of more than three times. In fiscal 2022, revenue growth has continued to climb, with all three year-over-year quarterly growth rates ranging from 62% to 63%.
Zscaler's success is largely due to the company's ability to cultivate new partnerships with existing clients. For the corporation, it's simple to generate more income on a per-user basis that adds up to significant advantages overall.
The co-founder and CEO, Jay Chaudhry has poured his heart and everything into Zscaler, but what has surprised him most is how much his team has accepted his vision. Employees have a 97% approval rating for the co-job founder's as CEO. That earned him a spot on Glassdoor's list of the best CEOs of the year to come.
Zscaler remains a priority for Chaudhry in terms of his own finances. A 19 percent stake in his own name and a further 21 percent through trusts for the benefit of Chaudhry's family members are held by him. It's worth close to $8.8 billion at current levels if you combine the two stakes.
The importance of cyber security cannot be overstated. Global economic fragility is being exposed by challenges such as supply chain interruptions and the erosion of geopolitical stability, making it imperative that the internet be protected as a commercial resource.
Zscaler sees enormous potential in further development. It estimates that Zscaler has the potential to add 900 million additional users from its present market of 335 million serviceable users at firms with more than 2,000 workers, both via smaller commercial enterprises and through B2B agreements. Another factor is that Zscaler has a $72 billion core serviceable market potential and only 150 million serviceable workloads, making its present level of serviceable workloads seem small.
Numerous factors are likely to contribute to the company's success. Customers who already utilise Zscaler's platform will continue to do so in greater numbers. The corporation plans to increase its foreign sales capabilities. Most significantly, Zscaler constantly spends at least 15% of its sales in R&D in order to maintain its leading position.
If you don't know anything about Cybersecurity then I'd recommend giving this one a miss. Its a fairly complicated business structure with even more complicated pricing models to get your head around if you are new to cybersecurity. And it's not exactly cheap either, currently trading at 25 EV / Revenue. However if you are into Cybersecurity then chances are you've already heard of these guys or are currently using them, in which case I recommend a close look as a potential investment.