What is Palo Alto Networks doing?

Acquiring products to expand their core cloud security business

Disclaimer: Opinions expressed are solely my own and do not express the views or opinions of my employer or any other entities with which I am affiliated.

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I’m finally getting around to discussing the rumors of two potential Palo Alto Networks acquisitions: Talon Cyber Security and Dig Security. It’s been 10 months since their last acquisition of Cider Security. I’ve done a couple of posts on Palo Alto Networks about how it could fail and how it could succeed.

As a disclaimer, as of this writing, I don’t have any direct financial interest in Palo Alto Networks, Talon Security, or Dig Security, and I don’t plan to initiate a position in the next 72 hours. I also don’t currently use these products but am open to trying them!

What are these companies?

I gave a summary of Palo Alto Networks in my post about how it fails. It is currently a cloud security company with a legacy firewall business, but almost the whole cloud security business was created through acquisitions.

Talon Cyber Security started in 2021, and they are building a Chromium-based enterprise browser. It’s an interesting company that believes that the increased use of SaaS apps and as a result, the browser, has made the browser a larger threat vector.

Dig Security also started in 2021, and they are focused on building a data security platform for the cloud. Given the modern data stack and the large amount of data in the cloud, organizations need new tools to securely manage and monitor this data. It can also be viewed as a cloud-focused data loss prevention (DLP) tool.

The question is why is Palo Alto Networks interested in these companies.

Focused on acquisition to innovate

In a previous post, I talked about how the lack of innovation and failure to capture market share in new security markets, specifically the developer security market, will be a failure mode for Palo Alto Networks. In fact, it would be unclear where Palo Alto Networks would be right now if it didn’t enter the cloud security business with Nikesh Arora making several acquisitions to develop the business from scratch. Although highly profitable, their legacy firewall business is shrinking.