Monday Morning Impact – September 25

Dell’Oro: SASE Quarterly Revenue Doubled from $1 to $2 Billion Over 10 Quarters

The overall SASE market – consisting of SD-WAN and SSE (Security Service Edge) solutions – bucked economic uncertainty with 38 percent year-over-year (Y/Y) revenue growth in 2Q 2023, according to the Dell’Oro Group, a Redwood City, California-based market research firm. Quarterly revenue doubled in just ten quarters, breaking through the $2 billion marker to set a new record, according to Dell’Oro.

“Even though sales cycles are longer and additional budget scrutiny is the norm in the current macroeconomic environment, we were pleasantly surprised with the strength of the SASE market,” said Mauricio Sanchez, Sr. Research Director, Enterprise Networking and Security at Dell’Oro Group. Beyond the argument around SASE’s superior architecture to provide users secure access to cloud-based applications from anywhere, we see SASE pushing into end-to-end network application monitoring and data protection realms that together substantially raise customer appeal. While many customers look to SD-WAN and SSE’s SWG, CASB, ZTNA, and FWaaS functionality as table stakes, vendors that show more and can deliver value to adjacent areas stand to distinguish themselves in a crowded market,” added Sanchez.

According to the report, Cisco retook the number one revenue spot in overall SASE after losing it for the first time in 1Q 2023. Zscaler, Palo Alto Networks, Broadcom (Symantec), and Fortinet rounded out the top five. Revenue associated with single-vendor SASE (vendors that offer both SD-WAN and SSE) grew nearly 70 percent Y/Y and represented over half the SASE market. The top five single-vendor SASE vendors were Cisco, Palo Alto Networks, Fortinet, Netskope, and Versa Networks.

The Dell’Oro Group SASE & SD-WAN Report includes manufacturers’ revenue covering the SASE and Access Router markets.

Channel Impact^®
The data suggests that enterprises are going all-in to improve networking and security services in the mobile- and cloud-first era.

eSentire Announces Security Partnership with Kterio

eSentire, Inc., a Managed Detection and Response (MDR) vendor, and Kterio, which specializes in smart building operating systems, have formed a new partnership for the Healthcare, Industrial and Commercial Real Estate sectors. Together, the two companies plan to evaluate customer risks across traditional threat vectors and the building infrastructures supporting sustainability initiatives, building management, and operations.

Kterio OS uses Machine Learning and Artificial Intelligence to deliver portfolio-level, site-level, & equipment-level reporting, benchmarking, and asset visualization. The objective is to help customers reduce energy consumption and maintenance calls while supporting AI-enabled capital-expense optimization. eSentire, meanwhile, comes to the table with Exposure Management, Managed Detection and Response, and Incident Response services.

“Clients and ecosystem partners are seeking solutions, which coalesce cybersecurity controls with building asset controls, to form a complete risk picture,” said Bob Layton, Chief Channel Officer, eSentire. “Organizations will also see operational efficiency and cyber resilience gains through this unification. Our Healthcare and Industrial clients are solving for this now and bringing eSentire to the table to deliver the security operations expertise needed. This partnership with Kterio is integral in furthering the visibility and control we can deliver across IoT environments.”

The two companies will explore joint service offerings to mutual customers while creating new paths to enhance cyber resilience and improve attack surface visibility across operational controls.

“We are delighted to form this new ecosystem partnership with eSentire,” said Larry Yogel, Kterio Chairman and CEO. “Our clients around the world are solving operational controls and efficiencies utilizing Kterio OS ML/AI tools right now. They’re asking us for cybersecurity solutions that tie into the Kterio data science and enterprise-class service portfolio.”

Channel Impact^®
Partners serving clients in the targeted vertical markets are seeking broader, more robust solution outcomes to reduce cybersecurity risk while maintaining performance. eSentire and Kterio see themselves as uniquely positioned to deliver a 24/7 solution to support multiple physical sites of critical infrastructure firms.

Tenable Acquires Ermetic to Support Visibility, Assessment and Remediation

Tenable has signed an agreement to acquire Ermetic Ltd., a cloud-native application protection platform (CNAPP) company, and a provider of cloud infrastructure entitlement management (CIEM).

“We will have an opportunity to put additional market-leading cloud security capabilities into the hands of tens of thousands of customers,” said Amit Yoran, chairman and chief executive officer, Tenable. “Together, we will be able to deliver a holistic view of the modern attack surface and help organizations reduce exposure and risk, using identity as an essential foundation.”

The combination of Tenable and Ermetic is expected to provide customers and channel partners with a unified and agentless solution that automates asset discovery, risk analysis, accelerated remediation and compliance. The combined system also manages human and service identities for cloud infrastructure, and provides context across all cloud and on-premises resources, including workloads, identities, and data.

“The combination of Tenable’s rich exposure management data and Ermetic’s cloud solutions will provide unprecedented levels of actionable visibility and value,” said Shai Morag, CEO and co-founder of Ermetic. “It will remove the complexity that makes managing cloud environments so challenging.”

Under the terms of the agreement, Tenable will acquire Ermetic for approximately $240 million in cash and $25 million in restricted stock and RSUs, subject to customary purchase price adjustments. The acquisition is expected to close early in the fourth quarter 2023, subject to customary closing conditions. Tenable expects to fund the cash portion of the purchase price with existing cash.

Channel Impact^®
Combining Tenable’s cloud security offering with Ermetic’s multi-cloud CNAPP and CIEM is intended to give security teams context and prioritization guidance to make efficient and accurate remediation decisions.