In the past week, CrowdStrike raised $200 million at a $3 billion valuation and Cylance announced $120 million in new funding along with 90% yr/yr growth and 4,000 customers. They are not alone: Tanium, Cybereason, and Sentinel One have each raised over $100M. Not to be outdone, Carbon Black had a successful IPO in May and posted Q1/18 revenue of nearly $50M. Each of these firms is growing rapidly and has taken market share from legacy security leaders including McAfee, Symantec, Sophos, and Trend Micro.
A big part of the answer lies in the tectonic shifts brought about by the movement toward mobility and the cloud. The number, variety, and context of how we use mobile devices has greatly expanded the attack surface for every organization and exposed the limitations of legacy network security technologies to recognize and respond to emerging threats. These risks continue to increase as enterprises migrate to the cloud and give their employees, customers, and suppliers richer access to applications and sensitive data.
In response, CIOs and CISOs are beginning to consolidate their endpoint security tools into a threat-focused security suite that includes vulnerability management and asset management. Investors in Silicon Valley and Wall Street have taken notice. Some, such as KeyBanc, suggest the endpoint security market may be much larger than the $7-8B quoted by IDC after factoring in attainable portions of the cloud security market.
These new funding rounds will serve to accelerate the fierce competition across endpoint security leaders. What does it take to win? In part, the winners will be the ones who deliver superior solutions to their customers through channel execution and partnerships with leaders in identity management, data security, and service management. More on this last point in future blog posts.
For now, let’s get ready for the endpoint rumble.
– Jim Pflaging