Thread regarding IBM layoffs

https://www.wsj.com/articles/ibm-and-palo-alto-networks-deal-prompts-questions-over-appetite-for-cybersecurityplatforms-2b2db1bc

IBM and Palo Alto Networks Deal Prompts Questions Over Appetite for Cybersecurity Platforms --

Cyber firms are pitching software platforms instead of individual tools, but some companies may resist

By: Belle Lin
May 17, 2024 5:28 pm ET

Palo Alto Networks is betting businesses will continue buying security software as a platform, rather than individual tools. But there are signs not all enterprises are on board.

The Santa Clara, Calif.-based cybersecurity firm, which said Wednesday it would purchase International Business Machines’s QRadar cybersecurity cloud software, is also hoping to tap IBM’s base of enterprise customers as it pushes its vision of an artificial intelligence-based, all-in-one security platform.

Palo Alto Networks Chief Executive Nikesh Arora said in an interview that the purchase—terms of which weren’t disclosed—is designed to help customers “replace their entire stack” of disparate cybersecurity tools with the help of IBM’s more-than 1,000 consultants.

There is evidence the strategy has merit. As corporate cybersecurity budgets tightened last year, security and information-technology leaders were pressured to justify every dollar. That meant a push toward reducing the number of security products and vendors they work with—both to trim costs and encourage IT, operations and security departments to work more closely together.

Those trends have favored the largest security vendors, including Palo Alto Networks, which can offer integrated software security tools at lower cost.

For some companies, however, committing to a single cyber platform doesn’t make sense.

Chief information security officers, even if they are consolidating other cyber tools, don’t necessarily want to do so for threat detection and response. By using two or more vendors for that function, there is less risk an emerging threat will fall through the cracks.

“There’s always the potential risk of decreasing your technology stack to one vendor or to just a few vendors,” said Forrester Research cybersecurity principal analyst Allie Mellen. “You don’t want to put yourself in a situation where you’re missing things about the environment.”

Meg Anderson, chief information security officer of insurance and investment management firm Principal Financial, previously told The Wall Street Journal the company often signs one-year contracts with cybersecurity providers, partly to avoid relying too much on any one vendor.

Security platforms can also end up costing businesses more in the long-term, said Chirag Mehta, a Constellation Research vice president and principal analyst who focuses on cyber.

“As you go down that path and invest further, it gets harder and harder to get out,” Mehta said, referring to the idea of “vendor lock-in,” in which a business’s systems, software and data all sit within one digital platform. “Vendors can essentially increase their prices without customers having a choice, because the switching cost is very high.”

Consolidation also has the potential to threaten innovation in the cyber ecosystem by shutting out smaller players, Mehta added.

Palo Alto projected billings growth of 3% year-over-year when it reported quarterly earnings on Feb. 20, compared with the 16% growth analysts expected. To accelerate its goals, it has been giving away access to certain features to customers, with the goal of taking a larger share of IT spending budgets over the long run.

Palo Alto CEO Arora described the strategy in a recent earnings call as approaching customers with a two or three year cybersecurity consolidation plan: They can use Palo Alto’s platform for free until their existing contract with a rival vendor ends.

Wall Street will be looking for improved billings and free cash flow, said Brad Zelnick, Deutsche Bank’s managing director of software equity research. Some of Palo Alto’s cyber peers, including Zscaler, Cloudflare and Fortinet, have also faced challenges for a few quarters, citing changes in customer buying behavior.

“You are still coming out the other side of what was a pandemic-inspired supercycle during 2021,” Zelnick said, referring to the sharp rise in cybersecurity spending as businesses sought to ward off rising threats. “Now we’re coming out the other side of that, and I think what you’re seeing is just more normalization.”

When the sale closes, customers of IBM’s QRadar—which helps security analysts detect and respond to cyber threats—will be moved to Palo Alto’s Cortex XSIAM, which it has positioned as an AI and automation-powered cloud platform.

Anand Oswal, Palo Alto’s senior vice president and general manager of network security, said only a “platform approach” can combat attackers and cyber threats that are increasing in scale, sophistication and speed.

“We need to embrace technologies like artificial intelligence in our cybersecurity strategies for real-time security outcomes,” he said. “The ability to integrate solutions on a platform in order to aggregate and analyze data sources to create more powerful insights and actions is the enabler of success in the future.”

It looks like Qradar brought in 500 million

https://www.crn.com/news/security/2024/ibm-helping-partners-join-palo-alto-networks-with-qradar-sale-ahead

Re: post @tsr+1syXmTpO

when you pay peanuts like AK and IBM HR does, you hire monkeys. Oooops !

"Given how Wall Street has punished any company who doesn’t make their revenue projection, I would speculate that IBM and most other Fortune 500 companies are restructuring their operations to minimize the revenue shortfall risk. "

This always seemed backwards to me... why isn't the Analyst punished for making a bad projection?

Given how Wall Street has punished any company who doesn’t make their revenue projection, I would speculate that IBM and most other Fortune 500 companies are restructuring their operations to minimize the revenue shortfall risk. Qradar had declining revenues in an ultra competitive marketplace. Essentially the IBM exec’s were exposed to too much risk of a revenue shortfall. CEO and CFO’s are now graded by two measurements Earnings per share (easily manipulated) and revenue growth or shortfall (much harder to manipulate) Companies are selling (or in IBM’s case partnering) off the underperforming segments before they drag the stock price down. So who is in the IBM crosshairs? Just look at any earnings report and watch for negative revenue over several quarters and you have your answer. Within IBM the weakest of weak sisters = TSS

RE post: @dlc+1syXmTpO

how about ASAP for the next round of layoffs after the sale of Qradar ?

After all, AK desperately needs the money to pay for his bonus next year. Not to mention JG, JW, JA and JK need their cut too as they are getting on in years.

Security SW has had flat to declining revenue for the past 4 quarters. This decision was inevitable. As goes mainframe so goes IBM’s future strategy. Scaleout product sets are definitely in the bullseye. Ask yourself are any of the scaleout product sets growing revenue? Scaleout power, scaleout storage, scaleout TSS, and scaleout traditional cloud are all shrinking. You can see your future with this decision and it’s coming fast. IBM is shopping for a partner so they can lower headcount and revenue shrink. Remember it’s all about cost take out.

So Palo Alto buys a product from IBM with the plan to discontinue it and try to migrate its users onto their products. How little would you have to pay for a product to pursue this strategy? I didn't see any terms released but I would guess we just sold QRadar for a bag of peanuts.

Partner up? More like firesale of customer accounts and assets.

If it’s not data and ai. It will go

wow IBM is giving up (selling) QRadar security solution ? I thought that was the crown jewel of security

how long after for the layoffs?