Palo Alto Networks has initiated a bold move to drive the security platform approach transition by offering a “no-cost” period for its platforms until customers’ existing legacy contracts expire.

Palo Alto Networks Chairman and Chief Executive Officer Nikesh Arora said during the company’s earnings call for Q2 2024 that its success over the last five years has been driven by the shift to platformization.

The security giant offers three platforms that include networks security/zero trust platform across its appliance, software and secure access service edge (SASE) form factors, cloud security/code-to-cloud platform under the brand Prisma Cloud and continuous security operations platform, dubbed Cortex.

In the second fiscal quarter, 79% of Palo Alto Networks’ Global 2000 customers have transacted with the vendor on at least two of its platforms and 57% have had transactions on all three.

“We see compelling economics with multi-platform wins,” Arora said. “Our two-platform customers have an average customer lifetime value that is more than five times that of our single-platform customer. For our three-platform customers, that is more than 40 times larger.”

As organizations continue to consolidate their security vendors, Palo Alto Networks is driving a shift in its strategy in wanting to accelerate both its platformization and consolidation and activating its artificial intelligence (AI) leadership, he added.

Palo Alto Networks trials free breach support

In addition to the consolidation trend, Palo Alto Networks also started to notice customers are facing spending fatigue in cybersecurity, according to Arora.

“This is new, as adding incremental point products is not necessarily driving a better security outcome for them,” he said. “This is driving a greater focus on ROI [return on investment] and total cost of ownership amongst most customers.”

Against this backdrop, Arora said that some of Palo Alto Networks’ competitors have begun to roll back introduced price increases, while some legacy vendors and startups start “rogue behavior” trying to desperately hold on to customers.

“We intend to combat that with investing in this space and trying to accelerate platformization and consolidation for our customers,” he said.

Last quarter, the vendor offered 1,500 of its top customers an opportunity to get free support during a breach, which included 250 hours of free breach consulting. In 90 days, 400 of those customers signed up with Palo Alto Networks to continue the incident response services.

The vendor plans to offer more support for its three platforms, including legacy trade-ins, no-cost introductory offers, product add-ons and incentives to accelerate estate standardization.

A typical customer entering into a platformization transaction program may start paying Palo Alto Networks only after its obligation to existing legacy vendors ends.

“As these programs ramp over the next year, we expect a change to our billings and revenue growth for the next 12 to 18 months,” Arora said.

“As customers move into the period where contracts have a full billing and revenue contribution, we expect to see an acceleration in our top-line metrics. Beyond this dip and acceleration in our top-line metrics, we believe we can sustain higher growth rates for longer, driven by sticky and broad platform relationships with incremental customers, allowing us to aspire to a goal of $15 billion in next-generation security in 2030,” he added.

Cortex platform offers ‘no-cost’ period

Today, Palo Alto Networks announced a new Cortex platform offer to provide a “no-cost” period of the solution until customers’ existing legacy contracts expire.

The vendor claims this offer enables qualified customers to accelerate platformization and transition to Cortex Extended Detection and Response (XDR) services. The program also includes a baseline package of “no-cost” professional services to assist with the agent migration.