Zscaler's Q2'25 report was solid, but their message to the market was even more powerful. Sneaky powerful — not in a misleading way, just confident in some subtle and hard-to-detect ways. Put bluntly (my words, not theirs): we're going to own secure networking for enterprise customers, and there's still a lot of room to grow. Two critical points of interpretation: → Zero Trust Branch has a lot more upside than it might sound like. It's hard to think of something else in security that sounds this boring but is actually exciting. Exciting? Why?! Jay Chaudhry said it best: "Large enterprises have hundreds of thousands of branches out there." Regular enterprise businesses (not tech companies – think retail, manufacturing, financial services, healthcare, etc.) literally have branches everywhere. The word "branch" is just a networking code word to summarize the businesses you see everywhere: retail stores, banks, manufacturing plants, hospitals, satellite offices...you name it. All of those things (the ones owned by large enterprises, anyway) need to connect back to the enterprise mothership somehow. They've all been more or less neglected to date – relegated to archaic networking hardware and protocols. That's starting to change. Both security and experience matter now. Exactly why Zero Trust Branch is a big deal. → "Zero Trust Everywhere" is basically Zscaler's version of platformization. (Note: I'm just using "platformization" as a commonly understood term here.) Conceptually, it's the same idea as Palo Alto Networks or any other cybersecurity company driving adoption of multiple modules. In Zscaler terms, customers hit "Zero Trust Everywhere" status when they adopt one or more modules from three parts of their platform: Zero Trust Users, Zero Trust Cloud, and Zero Trust Branch. They're even counting how many companies have been "platformized" — 130, with a goal to 3x that number in 18 months. (Sound familiar? Palo Alto Networks and CrowdStrike both have their own flavors of this metric, too.) Zscaler is an enterprise-focused company. Enterprises re-architect their networks about once-a-career. Module adoption adds up to incredible stickiness. --- Things like Zero Trust Everywhere are clearly aspirational — it's going to take multiple hardware refresh cycles (read: over a decade) for this transition to play out. I like the ambition, though. Zscaler hitting $3 billion of ARR this fiscal year is basically inevitable. Their core business has a ton of upside left. Their newer businesses are off to a good start. I could go on. As Jay Chaudhry said, Zscaler is in a "rarified category of large publicly traded SaaS companies that are growing rapidly at scale." Exciting times ahead for one of cybersecurity's top companies.
Bradley Schagrin
8mo
it's all about unlocking value from those long-neglected legacy networks in retail, banking, healthcare, and beyond. As Jay Chaudhry pointed out, the sheer scale of enterprise branch networks offers enormous growth potential. With their core business set to hit $3B ARR and their newer modules off to a strong start, Zscaler’s vision is not just ambitious—it’s inevitable. Exciting times ahead for cybersecurity! #Cybersecurity #ZeroTrust #Innovation #EnterpriseSecurity #DigitalTransformation
I kind of agree, because network security for branch networks has been one of the biggest solutions I have ever designed (challenged by IDM, SOC and anti-fraud). Though, as soon as you approach these 10m+ USD deals you would find a lot of competition from low end vendors. Retail picks a low price above all as a rule of life.