Despite tightening budgets and heightened competition from large security firms and purpose-built secure access service edge (SASE) vendors, Zscaler Chairman and CEO Jay Chaudhry remains confident that the company will continue to grow and expand.

When asked about the competition from smaller, purpose-built SASE vendors during Zscaler’s latest earnings call, Chaudhry argued that Zscaler primarily serves large enterprises where these smaller vendors scarcely compete.

“A lot of those purpose-built vendors come from taking firewall as a service into a network together,” he said, and explained that while these vendors attempt to integrate SD-WAN into their offerings, many CSOs believe SD-WAN enables lateral-type movement.

“We think SD-WAN has to go away, it'll be replaced with zero-trust SD-WAN. That's the new market segment we are pioneering,” Chaudhry said.

Zscaler announced in January the general availability of its Zero Trust SD-WAN solution and portfolio of plug-and-play appliances designed to help customers modernize secure connectivity for branch offices, factories and data centers while also eliminating the need for ineffective firewalls and VPN. The move also targets the growing single-vendor SASE market.

In addition, Chaudhry claims that smaller SASE vendors and traditional firewall providers struggle to keep up. “Of course, they're trying to catch up and do what we did four years ago, but we've done another two years ahead. In the cyberspace, it's a race, and we keep on innovating at a faster pace,” the executive said.

Zscaler’s architectural advantage over large SASE and security vendors

Addressing investors’ concerns about intensifying competition from both specialized SASE players and larger security vendors, Chaudhry listed Zscaler’s advantages as:

• Architecture matters: Zscaler’s SASE strategy is built on its Zero Trust Exchange platform. Chaudhry likened the architecture gap to transitioning from a traditional car to an electric vehicle (EV). “Most of the large vendors are trying to build upon what they have and we don't believe they'll ever get there,” he said.
• Evolving market functionality: The SASE market is dynamic and has expanded significantly, especially in the areas of workload, IoT/OT devices and data protection. Chaudhry claims Zscaler is the “right platform,” leading in data protection and outperforming all competitors.
• Speed of innovation: Zscaler continuously innovates at a rapid pace and it’s not going to slow down, he said.
• Customer satisfaction: A Net Promoter Score (NPS) of 70 indicates high customer satisfaction, Chaudhry said, adding that 285 CXOs from Fortune 1,000 companies have made repeat purchases from Zscaler.

Customer willingness for SASE transition

Chaudhry did admit that the macroeconomic environment remains challenging and customer budget scrutiny remains high, which has impacted the willingness by customers to undertake transformational projects like SASE. However, he noted that CIOs, CISOs and boards are increasingly concerned about cybersecurity, particularly with the rise in ransomware attacks.

“If you play a critical role in minimizing cyberthreats, as we do with zero-trust architecture to minimize lateral movement, we get attention and engagement with C-level. But if then you can show the CXO that you are going to do this cyber initiative and you're going to save 'x' million dollars, you get more attention,” Chaudhry said. “So, those two things are helping us build a strong engagement and pipeline.”

Chaudhry pointed out the importance of showcasing both cybersecurity improvements and tangible cost savings to convince CFOs. “We engage with the C-level early on and show those benefits,” he said, “You think a firewall company will show savings? No, they want to protect their firewalls. They don't want to do cannibalization. We can cannibalize. We can actually take out all the firewalls and VPNs.”