Palo Alto Networks ( PANW Quick Quote PANW - Free Report) recently announced an expansion of its strategic alliance with Deloitte to offer managed security services to their shared U.S.-based clients. The latest announcement came within a year after the two companies entered into an agreement in July 2021 to deliver integrated security solutions to their mutual clients.
With the latest agreement, Palo Alto Networks’ cybersecurity technology portfolio will now be available in outcome-based, managed offerings from the global consulting giant – Deloitte. The managed security services offerings will help customers in threat detection, enable zero trust for U.S. organizations and enhance 5G security.
With the latest expanded strategic alliance, PANW and Deloitte will help companies augment their in-house security team capabilities and offer these teams instant access to managed third-party support.
Of late, cybersecurity has gained immense importance among organizations. On one hand, the pandemic accelerated the digital transformation and cloud migration process. Meanwhile, it created security and risk issues for companies. This has been driving demand for managed security services globally.
According to a latest report by Allied Market Research, the
global managed security services market is likely to reach $77.01 billion by 2030 from $22.45 billion in 2020, reflecting a CAGR of 12.8% during the 2021-2030 period.
With the growing need for enhanced security measures, given the rising security threats in interconnected systems laden with software, the demand for Palo Alto’s solutions is shooting up. The latest partnership extension with Deloitte showcases the credibility of Palo Alto Networks’ cybersecurity solutions and its deep commitment toward transforming network capabilities in the U.S. market.
Palo Alto Networks has been benefiting from continuous deal wins and the increasing adoption of the company’s next-generation security platforms, attributable to the rise in the remote working environment and the need for stronger security. The growing traction in the Prisma and Cortex offerings also acted as a tailwind. The company also continued to acquire new customers and increase the wallet share with the existing customers.
However, PANW’s higher sales incentives related to Next-Generation Security products are likely to continue negatively impacting its bottom line. Additionally, forex headwinds and higher marketing and sales expenses are likely to continue hurting its profitability. Moreover, high acquisition-related expenses are denting margins. Additionally, the competition from the likes of Fortinet and Cisco is a perpetual concern for this Zacks Rank #4 (Sell) cybersecurity company.
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