Stage Is Set For Consolidation In ZTNA Market

Cloud Stage Is Set For Consolidation In ZTNA Market R. Scott Raynovich Contributor Opinions expressed by Forbes Contributors are their own. R.

Scott Raynovich is the Founder and Chief Analyst at Futuriom. com New! Follow this author to improve your content experience. Got it! Jul 29, 2022, 06:55pm EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin You may have heard about the hype in zero trust cybersecurity, a new architecture that assumes that everybody and everything is the bad guy.

Enterprises are increasingly looking for more sophisticated ways to guard networks and data, as the attack vectors includes with cloud and Internet use. ZTNA has received heightened interest in recent years, with significant venture capital (VC) investment as well as investment by larger companies building out their portfolios. Expect it to be a continued area of focus for networking and cybersecurity companies going forward, which will drive mergers and acquisitions, especially since the correction in technology markets has brought prices of private companies down.

What is Zero Trust? If you haven’t heard of it, zero trust is a hot buzzword (s) in cybersecurity circles. It is more a philosophy than a specific technology, but it has important implications for emerging cybersecurity technologies, especially in the networking area, where the applications of the approach are often referred to as zero trust network access (ZTNA). Cyber security IT engineer working on protecting network against cyberattack from hackers on .

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Secure access for online privacy and personal data protection. Hands typing on keyboard and PCB getty Because networks and applications are becoming more complex, it’s more important to verify and authenticate users and applications across multiple dimensions. We now have cloud networks, WiFi, Internet of Things (IoT) devices, remote users, and hybrid work.

ZTNA technology can be used to track and automate the authentication of devices and people as they use all these networks and applications, or in many cases travel across clouds or the Internet. A good base definition of ZTNA comes from the U. S.

National Institute of Standards and Technology (NIST), which describes zero trust as: “A collection of concepts and ideas designed to minimize uncertainty in enforcing accurate, least privilege per-request access decisions in information systems and services in the face of a network viewed as compromised. “ Recommended For You 1 Western Digital’s Journey To Build Business Resiliency Through Cloud And ERP Transformation More stories like this Fewer stories like this 2 Amazon Climate Pledge: Two Years In And Going Strong More stories like this Fewer stories like this 3 Microsoft Takes First Steps To Finally Kill The Password More stories like this Fewer stories like this NIST believes that a zero-trust strategy is “primarily focused on data and service protection but can and should be expanded to include all enterprise assets (devices, infrastructure, components, applications, virtual and cloud components) and subjects (end users, applications and other non-human entities that request information from resources. ” Many ZTNA systems as well as cybersecurity tools function in a similar way: Collect as much data as possible from different sources, then process or analyze that data in a policy engine that can determine if user access is legitimate or a threat.

These sources can include: • User credentials • Network devices (routers, switches) • Devices and endpoints • Log files • Applications workloads: For example, virtual machines (VMs) or containers • Cloud or applications data • API sources such as single sign on (SSO), security information and event management (SIEM), identity managers, threat intelligence databases So What’s Next for ZTNA? My firm Futuriom recently did a deep dive on the the ZTNA technology market , identifying the key trends and market leaders. This included an examination of all of the public companies and private companies involved. As mentioned, ZTNA is a hot area of VC investment these days, with more than 30 active startups.

Some startups in this area have recently received big rounds – for example Perimeter 81 just recently raised a $100 million C round in June . ZTNA is likely to be a fertile area of acquisition, with 20 major public cybersecurity companies adding ZTNA products and solutions. There have already been some deals in this area, notably Juniper Networks’ acquisition of WiteSand earlier this year .

Some of the conclusions our analyst team has drawn after examining this market: The current addressable market for ZTNA products and services is over $10 billion. This number will be driven as ZTNA products are used to replace outdated approaches in the multibillion-dollar Virtual Private Network (VPN) market, but the upside is much higher. While recent VC funding for ZTNA remains robust, it’s likely to slow down.

Valuations were too high in the startup market and the VC market is retrenching. With interest rates having risen substantially and tech markets down, 2021 valuations at greater than 20X sales are no longer sustainable. Consolidation is coming in the ZTNA vendor market.

With a VC slowdown and more than 20 strong ZTNA startups in the market, larger companies will make acquisitions to fill out ZTNA portfolios. The drop in startup valuations will be opportunistic for public companies that have the cash and equity to make plays. Many public companies have positioned themselves as ZTNA leaders – though they may need more technology to fill in parts of their portfolio.

Some of the public companies to watch as this market develops include Akamai, Appgate, Cisco, Cloudflare, Fortinet, Jamf, Juniper Networks, Okta, Palo Alto Networks, VMware, and Zscaler. Citrix, which recently went private, is also one to watch, along with another private equity company, Barracuda. On the startup side, look for companies to either raise more funding to take it to the next level or look for deals to exit.

Some of the key startups to watch include Axis Security, Banyan Security, Cato Networks, Cyolo, Elisity, Infiot, Illumio, NetFoundry, Netskope, Perimeter 81, Teleport, Versa Networks, Wandera, Waverly Labs, Zentera Systems. Some of these companies are even approaching maturity for potential Initial Public Offering (IPO). The companies I’d identify at the stage of development to start considering an IPO include Cato Networks, Netskope, and Versa Networks.

All of this makes ZTNA an exciting niche cybersecurity market to watch over the next year. Follow me on Twitter . Check out my website or some of my other work here .

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