Palo Alto Networks is acquiring cloud security software assets from IBM as part of a broader partnership that will give the cybersecurity company access to more consultants and a bigger customer base. The deal involves Palo Alto acquiring IBM’s QRadar cloud software and migrating existing customers to its security platform, Cortex Xsiam. IBM will be training over 1,000 of its consulting employees on Palo Alto’s products, strengthening the relationship between the two companies.
Consolidation within the security software industry has been increasing as companies prepare for a rise in attacks driven by artificial intelligence. Cisco recently closed a $28 billion acquisition of Splunk, a leading provider of security information and event management (SIEM) software. This move by Palo Alto to acquire IBM’s assets is seen as a strategic response to stay competitive in the rapidly changing cybersecurity landscape.
Palo Alto CEO Nikesh Arora highlighted the importance of being prepared to compete with industry giants like Splunk. The partnership between Palo Alto and IBM has been evolving for months, and this acquisition reinforces their commitment to enhancing their offerings and capabilities in the cybersecurity space. By incorporating IBM’s Watsonx large language models into Cortex Xsiam, Palo Alto aims to further strengthen its security platform.
The SIEM category has a long history, but Palo Alto only introduced Cortex Xsiam two years ago. Despite its relatively recent entry into the market, the product has gained significant momentum with over $90 million in bookings in the latest quarter. Arora emphasized that Palo Alto has been gaining market share from competitors and is positioned for continued growth.
For IBM, the partnership with Palo Alto presents an opportunity to bolster its consulting offerings with modern security tools. This move aligns with IBM’s goal of achieving revenue growth in the mid-single digits by 2024. In the first quarter of the year, IBM saw a 3% increase in revenue with a 2% rise in the consulting segment. By adopting Cortex Xsiam and Prisma Sase 3.0, IBM aims to enhance its security solutions and deliver enhanced value to its customers.
The transaction between Palo Alto Networks and IBM is expected to close by the end of September, pending regulatory approval and other conditions. This acquisition marks a strategic move for Palo Alto to strengthen its position in the cybersecurity market and expand its customer base through IBM’s consulting network. With the ever-evolving threat landscape, cybersecurity companies are increasingly looking to partnerships and acquisitions to enhance their capabilities and stay competitive in the face of advanced cyber threats.
