![]() ![]() Why not choose a security product that is immediately available from a name you trust, right? The company’s main business is in networking and routers, so it sells cybersecurity products as an add-on.Īccording to a Service Overview, Cisco bills its cybersecurity features as being a way for its customers to “ take full advantage of Cisco’s powerful core networking solutions to maximize productivity, efficiency, and reduce risk.” It is a strong selling point and it is made to a captive audience. One of Cisco’s biggest strengths is its ability to bundle. On a revenue basis, the difference is roughly 15% ($2.3 billion versus Palo Alto’s $2 billion). Cybersecurity is only a small percentage of the company’s revenue (around 5%), but Cisco is so big that its cybersecurity segment is still bigger than Palo Alto’s entire company. Is Cisco Worth Buying?Ĭisco ( NASDAQ: CSCO), on the other hand, is more diversified. With all that said, it is a pure-play for cybersecurity and that comes with certain risks. The company is forecasting that the piece of the cybersecurity market that it directly addresses will grow to $24 billion in 2020, up from just $19 billion in 2017. Going forward, there are some good reasons to be encouraged about Palo Alto Network’s prospects. While that momentum cannot last forever, Palo Alto Networks is finding ways to exponentially grow its opportunities through acquisition. In September 2018, Palo Alto Networks reported Q4 results that topped analysts estimates and the company has been posting 30% growth for several quarters in a row. “ The addition of their technologies allows us to offer the most comprehensive security for multi-cloud environments, including Amazon Web Services, Google Cloud Platform, and Microsoft Azure, and significantly strengthens our cloud strategy going forward.”Įven with all these acquisitions, Palo Alto is sitting well financially and it is making all the pieces work. “ We are thrilled to add RedLock’s technology to our cloud security offerings,” said the chairman and CEO of Palo Alto Networks, Nikesh Arora, of the acquisition. New entrants to the industry often struggle to get a foothold because they may not have the brand name or clout to back them at first, but all it takes is one big win, like finding a significant threat that one of the major companies missed, for that up-and-comer to become the next big thing. ![]() If an Internet attacker, hacker, or any other enemy of information can break through their systems, the cybersecurity company fails, and its stock runs down. ![]() While they were, in hindsight, overvalued at that time, today they viewed as more stable tech stocks – but there is risk.Ĭybersecurity companies are only as good as the products they sell. In 2000, these companies skyrocketed in value and many of them fell from that lofty place just as suddenly. However, they are not the investment juggernauts they once were. The software they produce keep applications and data safe from would-be attackers, but is it a good industry in which to invest? Pros and Cons of Cybersecurity StocksĬybersecurity stocks certainly have the potential for significant upside – just look at the predicted growth for the market – and a clear need. This is the industry that provides security for companies with online shopping portals as well as entire governments. IĭC predicts that cybersecurity as an industry will reach $120 billion by 2020 – and no wonder. IDC, a market intelligence company, says that spending in the sector increased by 10.3% to $83.5 billion in 2017 and it is forecasting the market to grow even further. ![]()
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