Security & Enterprise Networks Archives - Page 3 of 17

Reflecting on my recent attendance at the 2024 Tencent Global Industry Analyst Conference held on September 5^th in Shenzhen, China, I’m struck by Tencent Cloud’s ambitious plans to expand beyond its home market. The conference provided a comprehensive look at Tencent’s technological advancements, its strategy for global expansion, and the challenges it faces in an increasingly complex geopolitical landscape. Using the “glass half full or half empty” metaphor, we’ll explore the promising aspects and the obstacles of Tencent Cloud’s global expansion efforts.

The Glass Half Full: Tencent Cloud’s Strengths and Opportunities

Tencent Cloud’s executives, led by SVP and CTO Wang Huixing, emphasized their focus on business continuity and next-generation infrastructure. This push for technological advancement extends to Tencent’s AI offerings, with the company claiming to have one of the best Chinese-language Large Language Models (LLMs).

However, what sets Tencent Cloud apart is not just its technology but its experience. As Poshu Yeung, SVP of Tencent Cloud International, emphasized, “We don’t just sell the products. We sell our experience.”

Tencent’s background in running successful apps like WeChat, which boasts over 1.3 billion monthly active users, gives it unique insights to share with clients. WeChat combines messaging, social media, mobile payments, e-commerce, and a vast mini-program ecosystem, making it a “super app” with few equals in the global digital landscape.

Tencent Cloud’s globalization efforts were a key theme throughout the conference. While the company has data centers on almost every continent, its natural expansion focuses on the Asia Pacific region, particularly countries like Indonesia, Malaysia, Thailand, and the Philippines. The Middle East and Africa, specifically Saudi Arabia, UAE, and South Africa were also mentioned as areas of interest.

A significant development in Tencent Cloud’s strategy is its focus on building a robust partner ecosystem. After having just a handful of partners three years ago, Yeung revealed that Tencent Cloud now boasts close to 1,000 active partners worldwide. These include Managed Service Providers (MSPs), Application Service Providers (ASPs), and Cloud Service Providers (CSPs). The contribution of these partners to Tencent Cloud’s revenue has grown from less than 10% to an expected 35% by the end of the year, with aims to cross 50% soon.

Tencent Cloud is positioning itself as more than just a technology provider. Yeung emphasized their approach of being a strategic partner to clients, helping them grow by leveraging Tencent’s experience in building and running successful digital products. This consultative approach, combined with their technical expertise, is how Tencent aims to differentiate itself in the market. In an interesting analogy, Yeung compared Tencent Cloud’s approach to the famous “Pepsi Challenge” from the Cola Wars, encouraging potential clients to try Tencent Cloud alongside other providers and judge for themselves.

The Glass Half Empty: Challenges and Hurdles

While the one-day Global Industry Analyst Summit didn’t focus on cybersecurity, I previously had been briefed late last year on Tencent Cloud’s security portfolio, which includes cloud and application security tooling. At first, I was disappointed that security wasn’t discussed during the industry summit, given its critical importance in cloud services. However, I later learned that security was given a dedicated session during the subsequent Tencent Digital Ecosystem Summit, a customer-focused event held the following day. Unfortunately, due to scheduling conflicts, I wasn’t able to attend the second day’s summit and hear about progress firsthand.

As Tencent Cloud continues its global expansion, security remains an important consideration for potential clients. Like all cloud providers, Tencent Cloud’s ability to meet various security needs and regulatory requirements will be a factor as companies evaluate their cloud options. The company’s experience in managing large-scale applications like WeChat could potentially offer unique insights in this area. However, as with any global technology provider, Tencent Cloud’s expansion efforts will need to navigate the complex landscape of international markets and varying regional requirements.

Indeed, the geopolitical landscape remains a significant factor in Tencent Cloud’s global ambitions. For many enterprises, particularly those in Western countries, Chinese cloud providers may be viewed cautiously due to data security concerns and regulatory pressures. This hesitancy extends beyond security features to encompass broader data governance and sovereignty issues. On the other hand, there are markets where Chinese technology might be actively preferred or seen as a viable alternative to US-dominated options, presenting both challenges and opportunities for Tencent’s expansion strategy.

Tencent’s current global cloud market position also presents challenges. According to the Dell’Oro 1Q24 Data Center IT Capex Quarterly Report, Tencent’s share of worldwide cloud revenue stands at about 2% as of Q1 2024, significantly behind the top U.S. cloud providers who collectively hold over 80% of the market. These figures underscore the uphill competition Tencent faces in challenging the Western giants but also highlight the substantial room for growth in the global market.

Conclusion: A Promising Future with Challenges to Overcome

As the cloud computing landscape continues to evolve, it’s clear that Tencent is determined to be more than just a regional player. Whether you see Tencent Cloud’s glass as half full or half empty, one thing is certain — the competition in the cloud market is heating up, which could be good news for enterprises worldwide.

Tencent Cloud’s rise promises increased choice and potentially more tailored solutions, particularly for businesses in Asia and emerging markets. However, the path to global cloud dominance is far from straightforward. To succeed in this highly competitive landscape, Tencent will need to navigate complex international relationships, address security concerns head-on, and continue to innovate at a rapid pace.

Despite the challenges, Tencent Cloud’s unique experience, growing partner ecosystem, and focus on underserved regions provide a strong foundation for growth. By leveraging its strengths and addressing its weaknesses, Tencent Cloud has the potential to reshape the global cloud landscape and offer compelling alternatives to established players.

Ultimately, Tencent’s global expansion might be the “Pepsi Challenge” the cloud industry needs. Just as that famous marketing campaign encouraged consumers to look beyond brand names and judge based on taste, Tencent invites global enterprises to look past preconceptions and judge cloud providers on their merits. Whether Tencent can convince the world to take a sip of its cloud offerings remains to be seen, but one thing is clear: the cloud competition is far from over, and Tencent’s bid to shake up the market is a development worth watching closely in the coming years.

As Tencent Cloud steps onto the global stage, the team here at Dell’Oro will meticulously track every percentage point of market share gained or lost. So, will you take the Tencent Cloud challenge? Dell’Oro and the rest of us will eagerly watch to see who does.

Like many in the security world, I, too, made the pilgrimage to Moscone Center last week to attend the RSA Conference 2024. The conference was a melting pot of ideas, innovations, and insights, with cybersecurity professionals from around the globe converging to discuss the industry’s future. Among the myriad announcements and presentations, three key themes emerged: AI-Powered security, Unified Security Architectures, and Zero Trust Adoption.

AI-Powered Security: The New Frontier

Artificial Intelligence (AI) has been a buzzword in the tech industry for years, but its application in cybersecurity has now moved from hype to reality. AI is being used to automate threat detection and response, reducing the time it takes to identify and mitigate potential attacks. It’s also being used to automatically analyze anomalies and correlations to prevent threats. This shift towards AI-powered security signifies a new era in cybersecurity, where intelligent, automated systems are replacing manual processes. However, as AI evolves rapidly, so does the sophistication of AI-powered threats, necessitating continuous innovation and adaptation in our defensive strategies.

Unified Security Platforms: Simplifying Complexity

The second theme that stood out was the move towards unified security platforms. Managing multiple, disparate security solutions can be daunting with the increasing complexity of today’s digital environments. There’s a trend toward offering comprehensive, integrated security platforms to address this issue. These unified platforms aim to provide end-to-end security, covering everything from cloud security to endpoint protection and everything in between. By consolidating various security functions into a single platform, these solutions aim to simplify security management and enhance visibility and control across the entire digital landscape. Industry momentum has gone as far as turning the word “platform” into a verb (“platformization”)!

While it would be ideal to have a single platform to rule them all, it’s unlikely an enterprise would or could put all its security eggs into a single vendor’s basket, whether due to political (“I don’t want to be beholden to a single vendor”), economic (“How can I get the best price if standardized on single vendor?”), or technological (“I need best-of-breed and no single vendor is best-of-breed across all security fronts”) reasons. Fortunately, vendors may be talking platforms, but they are also creating connective tissue between disparate systems and other vendors’ products, which ultimately benefits everyone.

Zero-Trust Adoption: A Paradigm Shift in Security

The third theme that emerged was the widespread adoption of Zero-Trust security models. In a Zero-Trust model, every user, device, application, and piece of data is treated as potentially compromised and verified before being granted access. This shift from the traditional ‘trust but verify’ approach to a ‘never trust, always verify’ model signifies a paradigm shift in security that has been around for numerous years but is finally catching fire.

However, it’s important to note that Zero-Trust isn’t one product or solution. It’s a comprehensive approach to security that can be applied across users, devices, applications, data, and network traffic. While in an ideal world, a single solution from a single vendor would span the entire spectrum, the reality is far more complex. There will always be multiple solutions and vendors, each with strengths and weaknesses. The challenge lies in integrating these diverse solutions into a cohesive security strategy that aligns with the principles of Zero Trust. Despite these challenges, the widespread adoption of Zero Trust is a positive step forward, helping organizations stay one step ahead of attackers and ensuring they are prepared for future challenges.

Conclusion

The RSA Conference 2024 provided a glimpse into the future of cybersecurity, highlighting the industry’s shift towards AI-powered security, unified architectures, and Zero-Trust models.

Lastly, I want to thank all the companies I had the pleasure of meeting at the conference. The companies, listed in alphabetical order, included Akamai, Aryaka, Aviatrix, Broadcom/Symantec, Cato Networks, Cisco, Cloudbrink, Cloudflare, Corelight, Ericsson/Cradlepoint, F5, Fastly, Fortinet, Hillstone Networks, HPE Aruba, Juniper Networks, Lookout, Netskope, OpenText, Orca Security, Palo Alto Networks, Skyhigh Security, Sophos, Trellix, Wiz, and Zscaler. If you’re reading this and from one of these companies, thank you for your insights and contributions to the cybersecurity industry.

If you have additional questions about my conversations at the conference, please reach out (mauricio@delloro.com).

Turbulent is the best word to describe the worldwide Enterprise Network equipment market over the past few years. Enterprise Network manufacturer revenues hit a high of $72 B in 2023. However, by the end of 2023, signs of an impending market shift appeared.

To predict what will happen next, we look back over the past ten years to identify the overarching trends that are influencing this market, which is made up of manufacturer revenues from hardware and software purchased by enterprises for network connectivity and security purposes, divided into the five sub-markets shown in the figure below.

Over the five-year period from 2014 and 2019, the worldwide Enterprise Network market experienced a Compound Annual Growth Rate (CAGR) of 7%. Manufacturers such as Cisco, Huawei, HPE, Arista, Palo Alto Networks and Fortinet have managed to grow revenues–even as challengers, such as Juniper and Zscaler, gained market share.

Tracking of Secure Service Edge (SSE) and Web Application Firewalls (WAF) markets began in 2019, contributing to the significant growth of the Network Security market. While annual growth of Switch and WLAN slowed in 2019, the fundamentals of the Network Security (firewall, SSE, SWG, WAF, and ADC) and Branch Routing markets (SD-WAN and access routing) remained robust, pushing overall network equipment spending up to $48 B.

The Market Trajectory is Altered

Then, in 2020, the pandemic hit. Workers vacated their offices and network projects ground to a halt. The following year, with IT leaders besieged with demands for networking to support remote work, companies tried to get digital transformation initiatives back on track – just as vendors began to experience supply shortages. Equipment hardware lead times became long – but worst of all, unpredictable. They could be close to normal, or they could be twenty times longer than normal, depending on the type of equipment and the day that the orders were placed. Manufacturers began to accumulate large backlogs of orders. Equipment prices began to rise, keeping industry revenues growing despite the longer wait times for enterprises.

Near the end of 2022 and into early 2023, the tide began to change. As supply began to flow to the equipment vendors, they began to ship more networking equipment. Then, backlogs spiraled downward, and the market was flooded. Manufacturer revenues ballooned.

Since the end of 2022, Dell’Oro Group has been predicting a digestion period, or a pause in spending on some segments of the Enterprise Network market. This slowdown first appeared in Wireless LAN revenues in 3Q23, as the market contracted Y/Y for the first time since 2Q20. This was followed by Y/Y contractions in Branch Routing and Campus Switching in 4Q23. These contractions are expected to continue throughout most of 2024. During the period of supply constraints, many enterprises adjusted their ordering behavior, placing orders in 2022 for equipment they required in 2024. In addition, in times of scarcity, distribution companies ordered more equipment than they needed. Now that the deliveries have been made, working through the excess inventory will take time.

An Uneven Revenue Recovery

Supply constraints and rapid backorder fulfillment have created the roller coaster trajectory of the worldwide Enterprise Networking market. However, if we look more closely, we see that the peaks and troughs of each sub-market are not aligned.

Growth of Enterprise Data Center switching revenue, in particular, did not reach the same heights in 2023 as the other enterprise networking markets. However, revenue growth remained positive throughout the year, driven by large enterprises. The supply constraints for switches were resolved later than those for WLAN, and manufacturer backlogs have remained elevated for longer, leading to a continued stretch of Y/Y growth in revenues. Dell’Oro group is also projecting a digestion period for enterprise switching – although it is expected to be offset from that of WLAN and Branch Routing.

In contrast, the Network Security market stands out as the only market that has grown at least 5% every year for the last ten years. This consistent growth reflects the critical role of network security in enterprise strategies to mitigate cyber threats. Although the Y/Y expansion has been slowed somewhat by the enterprise digestion phenomenon, market expansion is anticipated again in 2024, whereas Dell’Oro Group expects all other segments to contract.

A Shift in IT Priorities

The continued importance of IT security to enterprises will cause a share shift in Enterprise Network revenues over the longer term. In 2023, spending on Network Security more than doubled from just five years ago. By 2028 Dell’Oro Group expects Network Security to account for an even larger portion of equipment sales. On the other hand, the switch market is more mature. Following the increasing penetration of Work From Home and Hybrid Work models, Enterprises’ adoption of Wi-Fi First strategies has grown, dampening the expansion of Campus Switch revenues in favor of WLAN. In addition, enterprises’ shift to cloud computing has slowed the growth of Enterprise Data Center Switch spending.

Looking forward to the anticipated CAGR of the worldwide Enterprise Network market, Dell’Oro Group has a word of warning for industry observers. Using the elevated 2023 revenues as a baseline is sure to make future CAGR calculations look anemic. Taking an average over 2021 to 2023, smoothing out the supply release tsunami, allows us to predict that cumulative growth rates should return to pre-pandemic levels over the next five years.

We are in the midst of an AI revolution. Enterprises recognize the need to harness this technology to propel their businesses forward. However, amidst what seems like unlimited potential, IT leaders can be at a loss as to what concrete steps to take next.

AI training and inference has been a major influence on data center investments over the past few quarters. Orders for Data Center Physical Infrastructure, accelerator server components, and high-capacity switch ports have grown along with hyperscaler cloud expansion; in some cases, this growth has offset declines caused by pandemic-related supply problems.

Meanwhile, enterprise investments in AI infrastructure are only just beginning. The unfolding trends, described in more detail below, point to the need to invest not just in data centers, but also in campus networking.

Local Area Networks Trends

The need for a higher-capacity, high-performance LAN is growing. By 2027, the percentage of APs shipped to enterprises with multi-gig ports will rise to over 60% of the total APs shipped, almost double the rate of 2022. The combined shipments of 2.5, 5 and 10 Gbps campus switch ports will grow by over 150% between 2022 and 2027, fueled by increasing traffic on the LAN and higher-capacity Access Points (AP).
Spending on software licenses delivering AI Operations (AIOps) enhancements for WLAN management is forecasted to grow to 20% of WLAN spending in 2027, increasing faster than the overall WLAN market. Vendors embracing AIOps are expected to elevate the frequency of feature updates, such that enterprises will have access to new features on a monthly or even weekly basis.

Enterprise Data Center Trends

Over the next five years, enterprises will increase adoption of Hybrid Cloud infrastructures. Mission-critical AI workloads will drive investments in accelerated computing for private data centers. Enterprises will also benefit from a consumption-oriented cost structure of the Public Cloud for AI workloads. Cloud service providers will offer a variety of AI-enabled applications to enterprises to increase efficiencies and shorten product development cycles.
Enterprises will invest in Edge Computing deployments for business to business and business to consumer applications such as virtual and augmented reality, smart manufacturing, and smart retail.
Dell’Oro Group predicts that in 2027, over a quarter of data center switch ports shipped to large enterprises will be 400 Gbps or higher, compared to 9% in 2022. The adoption of higher speed interfaces will be driven by AI and High-Performance Compute (HPC) applications.

The trends indicate that whether an enterprise will use predictive, generative, or conversational AI—IT architectures must adapt. Where should leaders start investing, given that it is still early days? What overarching principles should guide the enterprise’s IT transformation?

Analysis of some recent network transformation projects and discussions with industry leaders have shown that certain common themes have been guiding investments. Two of these themes, discussed below, are helping enterprises prioritize investments to meet their IT needs today, while allowing them to prepare their networks and computing infrastructure for the future.

1. Focus on Experience

The best way for an enterprise to align IT investments to its core business strategy is to center requirements on its customers’, its employees’, or its users’ experiences. As the use of AI applications intensifies in enterprises, network performance is becoming critical in the pursuit of excellent user experience. IT organizations are adopting various strategies to ensure that their IT infrastructure is meeting users’ needs.

Many organizations are implementing a Wi-Fi First approach, deploying high-quality wireless connectivity across the entire footprint of an office space, even extending to outdoor spaces. This is particularly important for companies that have embraced a hybrid work model.

IT departments are able to prepare for the future by deploying software defined radios (SDR) on Wi-Fi APs. On the latest generations of Wi-Fi 6E and Wi-Fi 7 APs, SDRs can be reconfigured from operating in the 5 GHz band to operating in the new 6 GHz band. The decision to open a radio in the 6 GHz band can be made once there is a sufficient number of clients supporting the new frequency, resulting in increased throughput and reduced interference. SDRs are especially useful in countries that have regulations regarding use of the 6 GHz band that are expected to change in the future.

Because of the proliferation of Wi-Fi and IoT, enterprises must expand their campus backbone and switching capabilities. Dell’Oro Group predicts that in 2024, over 40% of WLAN APs will be shipped with a multi-gig port. The plethora of IoT devices has driven up the number of connections and increased demand for switch ports supporting Power over Ethernet (PoE). Higher grade, even optical, cables will all be necessary as network users rely more and more on quality network connectivity and data-rich applications.

With cutting-edge network and data center technologies available, enterprises can consider the ways in which latency improvements may enhance their operations. For example, in its September 2023 paper “Get Ready for Wi-Fi 7”, the Wireless Broadband Alliance (WBA) identified industrial uses cases for which more deterministic latency could be beneficial. Autonomous Mobile Robots and wireless industrial safety controls may become possible with the implementation of Stream Classification Service (SCS) in Wi-Fi 7. An IEEE task group has also demonstrated that Wi-Fi 7 using SCS QoS characteristics provides significant latency gains over previous technologies (Figure 1).

Figure 1 – Wi-Fi 7 SCS shows higher determinism for end to-end latency between 1-10 ms

Source: Dave Cavalcanti, Intel Corporation, for IEEE 802.11-22/634r0

Latency can be further reduced with the deployment of computing infrastructure in close proximity to the users of latency-sensitive applications. For geographically distributed enterprises, the management of multiple data centers can be complex. In this case, data center orchestration and unified management applications become critical for deploying and configuring services and workflows across multiple data centers, without risking security or reliability.

At the same time, As IT experts design their infrastructure, they have an additional lever on which they can pull to enhance user experience: the deployment of application-aware systems. Traditionally, networking has followed the OSI model of communications, with each layer of the model being unaware of the communications occurring at the layer above. Application aware systems can make connection-level decisions based on information provided by the application operating at a higher level in the stack.

Videoconferencing is an application that can greatly benefit from application-aware networking. IT departments can collect data from end-user devices, videoconference applications, and network operations platforms. They can use Machine Learning (ML) to identify the source of network problems and propose resolution suggestions. Networking equipment schedulers can be enhanced to optimize video streams or improve performance for certain groups of users, for specific applications, or for special events. Enhancements to support the high bandwidth of today’s video applications will lay the groundwork for the next generation of applications using very high resolution and volumetric video.

As data from different domains – data center, network, and application – come together, the management of IT infrastructure becomes more powerful. The power of unification becomes evident with the application of uniform security policy, faster resolution of problems and a broader high-performance connectivity. These three factors are the underlying pillars of an exceptional user experience.

2. Automate to Increase Efficiency

Enterprises are only just beginning to develop strategic plans that include the benefits of AI applications. However, investments in AIOps can be made today, and will dramatically improve an organizations’ efficiency.

AIOps make use of advanced analytics and ML algorithms to support the complex tasks of network and data center operations, helping to increase data center storage efficiency, predict network performance issues, or even automatically suggest and apply fixes to problems.

The foundation of AIOps is accurate input data. Network mapping ensures that all IT resources are identified, understood, and visualized, and that the relationships between them are captured, even as configurations change. AI/ML algorithms applied to the combination of network mapping data and real-time usage metrics can automate a wide range of operations tasks –and may even lead the industry to the nirvana of network management: closed-loop, or fully automated, operations.

Figure 2 – Beneficial Features of AIOps and Advanced Management

Whereas full closed-loop automation remains a distant target for most organizations, AIOps applications are commercially available for both LAN and data center solutions. Enterprises using AI-based management are providing compelling insights into the benefits of AIOps. One company with which we spoke told us they have reduced their LAN trouble tickets by over 90%, and an AIOps application identified a configuration problem in the network that had been reducing user quality of experience for years.

Deploying advanced network management capabilities is critical because enterprises across the world are having trouble finding and keeping IT staff. Companies want to focus the employees that they do have on projects that are valuable to their core business objectives. Spending valuable hours just “keeping the lights on” can hamper the introduction of other innovative IT projects.

A journey of a thousand miles begins with just one step, and the path to an AI revolution begins with a high-performance network. Automation of network and data center management will be an early win for IT leaders—just one of the many revolutions that AI models are sure to bring.

About three years ago, Zscaler’s CEO Jay Chaudhry expressed a viewpoint in an SDxCentral article that distanced the company from the SD-WAN market. Chaudhry stated, “Network security is not really very meaningful. We decouple network access and application access with zero trust. We don’t put people on the network, we connect a person to a particular application or service. If you believe that network and security should be decoupled, there’s no reason for Zscaler to get into the SD-WAN space.” This stance highlighted a philosophy focused on securing direct application connections rather than managing the broader network layer.

Fast forward to last week’s Zscaler Zero Trust (ZT) SD-WAN announcement. Zscaler unveiled a strategic pivot that places them squarely into the SD-WAN space, indicating a significant expansion of their focus towards networking. By introducing new hardware appliances, the Z connector series, Zscaler targets small to medium-sized branches, aiming to blend zero trust security with SD-WAN capabilities. This move positions Zscaler as a competitor against existing SD-WAN behemoths like Cisco, departing from Chaudhry’s earlier assertions.

I had the opportunity to sit down with Zscaler this week for a briefing on the new Z connector appliance family encompassing three models: the ZT 400, ZT600, and ZT 800. The hardware appliances range in performance from 200Mbps to 1Gbps, which Zscaler stated was sufficient for small to medium branches. Zscaler admitted the need for higher throughput hardware and is actively investigating. Until faster hardware arrives, customers must rely on the VM-based software appliance (Zscaler Branch Connector) that can scale horizontally with 3^rd-party load balancers.

A critical application of Zscaler’s strategy is enhancing IoT environments, with the appliances featuring IoT device discovery, yet, notably, they do not include Wi-Fi capabilities. Distinctively, Zscaler adopts a subscription-based model for its Z connector appliances, marking a departure from most of the industry’s standard practice of selling hardware solely through a capital expenditure (Capex) model. Details on the pricing remain confidential, with an announcement scheduled for this month (February) alongside the release of the Z connector software.

Zscaler’s SD-WAN strategy presents a streamlined, cloud-based alternative to complex traditional networking frameworks, emphasizing ease of management. The conversation underscored Zscaler’s potential to enhance or supplant current SD-WAN infrastructures. Yet, Zscaler recognizes its significant challenges in evolving into a hardware-centric enterprise. These challenges span the spectrum from regulatory compliance and establishing efficient distribution networks to ensuring next-day hardware replacement capabilities and bolstering support services. Additionally, Zscaler is focused on refining its SD-WAN solutions to enhance competitiveness and expand its offerings to support larger branch networks, necessitating integration with campus and Network Access Control (NAC) systems (in the vein of “Universal ZTNA”).

Adopting Zscaler Z-connector appliances positions Zscaler as a central network provider, managing secure application access via its Zero Trust Exchange and linking an enterprise’s operational integrity to its performance. This shift towards consuming a secure network as a service, akin to how cloud services for servers and storage are utilized, marks a significant change in enterprise networking that may feel foreign to some. Networking goes from hardware with blinking lights to an ephemeral service from the cloud. Despite this, it’s part of an industry-wide transformation, with other progressive vendors like Aryaka, Cato Networks, Cloudflare, and Versa Networks offering some or all their network services in a similar fashion.

This trend toward network as a service, the SASE framework, and multi-cloud networking are key pillars of my Distributed Cloud Network concept, which I discussed in my op-ed on SDxCentral. Collectively, these elements represent the future of enterprise networking, integrating new technology and consumption models into the broader, evolving landscape of enterprise IT strategies.

Zscaler’s evolution from sidestepping SD-WAN by exclusively relying on integrations with third-party SD-WAN vendors to now offering SD-WAN capabilities natively underscores the company’s adaptability and strategic growth. This shift highlights Zscaler’s responsiveness to changing market dynamics and marks a significant new chapter in its journey as a single-vendor SASE provider.

My SWOT analysis follows:

Strengths

Market-leading SSE with a strong security focus with zero trust architecture.
Simplified cloud management and deployment.
Targeted solutions for small to medium-sized branches.
Adoption of a modern subscription-based business model.

Weaknesses:

New entrant in the hardware-focused networking market.
Limited hardware portfolio breadth.
Pricing strategy not clearly defined.
Convincing established customers to switch from traditional vendors and approaches may pose challenges.
ZIA and ZPA are built on separate technology stacks and operate as distinct networks, unlike some newer SASE vendors that utilize a single network with a common technology stack. Having separate technology stacks/networks increases the risk of subpar networking performance and reliability.

Opportunities:

Rising demand for integrated security and networking solutions.
Shift towards service-oriented and cloud-based network management.
Opportunity to capture a niche market looking for simplified SD-WAN solutions.

Threats:

Competition from better-established SD-WAN vendors like Cisco, Fortinet, and Palo Alto Networks.
Resistance from customers loyal to traditional networking methods that rely on more of the security and networking smarts embedded in each SD-WAN device.
Need for continuous innovation in a rapidly changing SD-WAN and security landscape.
Newer SASE vendors offering a unified technology stack across functions may appeal to customers seeking streamlined solutions, posing a competitive threat to Zscaler’s dual-product approach.

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