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Zscaler Booms Amid Remote Cybersecurity Demands | #corporatesecurity | #businesssecurity | #


Global commerce was in transition before the pandemic. Now, businesses are accelerating their digital aspirations and work will never be the same.

That claim can definitively be backed up by the findings of Gartner Inc., a global research firm. Analysts who surveyed business leaders found a majority of respondents were looking to make work from home a permanent part of their business model.

Securing all those new connections is a big opportunity for investors.

Many firms were already racing ahead with costly digital transformation projects. The promise of eliminating wasteful spending, while finding new ways to connect with and understand customers, appealed to chief financial officers. The investment seemed like a win-win.

Then, the COVID-19 crisis accelerated everything. It also provided companies with an unexpected insight.

It turns out that work from home, as a business model, is a productivity boon.

First off, there are real cost savings at the enterprise level. According to a story at ZD Net, Gartner researchers found that CFOs have been able to slash spending on leadership events and sales conferences, while delaying or freezing new hires completely. Researchers also found that 13% of finance managers have cut real estate expenses. These long-lasting cuts are indicative of businesses preparing for a post pandemic new normal.

Even if businesses can get back to work quickly, putting large numbers of employees in office towers and into the mass transit system is likely to be more difficult.

So far, the crisis has killed nearly 110,000 people globally. Some 1.8 million people have been infected, with 513,000 cases in the United States. Most of these cases are concentrated in dense urban centers that employ millions. Shifting more workers to remote locations makes sense.

But the opportunity for investors isn’t in the transition to telecommuting; it’s in security.

Many easy-to-use remote applications were never built for this transition. They lack the security controls enterprises need for data safety. With computer hackers trying to take advantage of more people working remotely, this kind of security is absolutely crucial.

Take Zoom Video for example. The easy-to-use video conferencing application zoomed from 10 million users in December to a staggering 200 million in April. Unfortunately, scale exposed some inherent weaknesses. The Washington Post noted that hackers have been able to exploit security holes in the application to eavesdrop and even steal data.

The result? Last week, Zoom was banned by school systems from New York state to Singapore. Google, NASA, the United States Senate and others soon followed.

To make a successful transition to a work from home system, enterprises need to secure their data.

Enter Zscaler. Zscaler builds walls around data, not applications. The San Jose, Calif., company makes cloud-based, next-generation firewalls. With millions of remote employees connecting to enterprise servers via unsophisticated home Wi-Fi, focusing on the data is clearly the way to go. In fact, it may be the only feasible solution in the new normal.

This idea is called Secure Access Service Edge, and it’s gaining traction. Zscaler’s Internet Access (IA) platform is a Gartner technology leader and customer choice award winner.

IA processes 35 billion requests with 125,000 unique security updates every day. Every endpoint, from powerful workstations and laptops, to smartphones and tiny Internet of Things devices, gets the same level of security. When a threat is identified anywhere, it gets blocked on the ZIA cloud platform everywhere.

That kind of versatility appeals to corporate customers. Consequently, Zscaler has grown quickly, attracting a stable of high-profile clients. Sales have been compounding in the 50% annual growth rate for years thanks to clients like Facebook and Google. Revenues jumped from only $53 million in 2015 to $302 million through 2019.

CEO Jay Chaundry met with analysts in February. He talked about winning 57,000 subscriptions from a Fortune 500 materials science company. Another deal with a Fortune 100 healthcare company netted coverage for 65,000 employees.

The coronavirus pandemic will unquestionably accelerate their business momentum. Zscaler software gives enterprises the ability to build walls around data, even when networked applications have been compromised. And the cloud-based code works across low security Wi-Fi networks at home … and inside delis and coffee shops, too.

As enterprises begin to change the way, and where, their employees work, Zscaler could become an indispensable service.

After reaching $90 July 2019, Zscaler shares have been in retreat. The stock fell to $35 in the throes of the March meltdown, only to snapback sharply. At $62.50, shares trade at 23.5x sales.

Long-term growth investors should enter new positions into a decline.

In the meantime, get ready for innovative companies like Zscaler to start revolutionizing our new world.



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