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Zscaler's acquisition of Avalor marks a significant step in the cybersecurity industry. By integrating Avalor’s Data Fabric for Security™, Zscaler aims to enhance its AI-driven security capabilities. This strategic move is expected to improve real-time threat prevention and operational efficiencies, positioning Zscaler to offer more advanced security solutions in a competitive market.
Avalor, now part of Zscaler, offers a Unified Vulnerability Management (UVM) platform built on its Data Fabric for Security. This platform aggregates, deduplicates, and enriches data from over 150 sources, leveraging machine learning and artificial intelligence to enhance security outcomes. Unique features include automated remediation workflows, contextualized risk scoring, and comprehensive reporting dashboards. These capabilities enable organizations to prioritize risks and improve their security posture efficiently.
Zscaler is a prominent leader in cybersecurity and zero trust solutions, leveraging the largest security cloud to secure and simplify business operations for major global companies. Key offerings include secure workforce access, cloud security, IoT/OT protection, B2B connectivity, cyberthreat protection, data protection, zero trust networking, and risk management. Recognized in the 2024 Gartner® Magic Quadrant™ for Security Service Edge, Zscaler secures 35% of Global 2000 companies and processes 500 billion transactions daily, underscoring its significant market influence.
Zscaler acquired Avalor on March 13, 2024. This acquisition comes at a pivotal time in the cybersecurity industry, marked by rapid advancements in AI and a notable decline in M&A activity. The integration of Avalor’s Data Fabric for Security™ into Zscaler’s platform aims to enhance AI-driven security insights and threat prevention, addressing the growing need for robust cybersecurity measures to combat AI-led threats. This strategic move positions Zscaler to leverage massive data sets for improved risk mitigation and operational efficiencies.
Market Expansion: The acquisition of Avalor allows Zscaler to expand its market reach by integrating Avalor's capabilities into its platform. This includes access to Avalor's ~80-person team and its existing customer base, which will be bolstered by Zscaler's 7,000 customers and 4,200 channel partners globally. Additionally, Avalor’s Data Fabric for Security™ platform will enable Zscaler to offer enhanced security insights and automated security operations, thereby expanding its service offerings and market reach.
Technology Integration: The integration of Avalor’s Data Fabric for Security™ into Zscaler’s Zero Trust Exchange platform is a key technological advancement. This integration will enable real-time AI-driven analytics, dynamic prioritization, streamlined reporting, zero-copy analytics, and real-time incident mitigation. It also includes advanced threat detection, auto data discovery, classification, and policy generation, leveraging Zscaler's extensive security cloud data to train security-specific AI models for better vulnerability identification and breach prevention.
Competitive Advantage: Zscaler's competitive advantage is bolstered by its ability to leverage a massive data foundation from over 400 billion daily transactions and the integration of Avalor’s Data Fabric for Security. This allows Zscaler to develop pioneering AI-driven solutions like Zscaler Risk360 and Zscaler Business Insights, setting a new benchmark for proactive cybersecurity and business intelligence. The acquisition also enhances Zscaler's capabilities in identifying vulnerabilities, predicting and preventing breaches, and fully automating AI-driven decision-making processes, positioning Zscaler favorably in a slow-to-stagnant cybersecurity M&A market.
The acquisition of Avalor by Zscaler has led to significant changes in operations and management. Avalor will continue to operate independently as a complete team under the Zscaler umbrella, ensuring that its unique culture and operational dynamics remain intact. This integration brings Avalor's ~80-person team into Zscaler, expanding its workforce and leveraging their expertise in Data Fabric for Security. The acquisition also involves a purchase price paid predominantly in cash, with a portion delivered in the form of equity subject to vesting conditions, ensuring a smooth transition and alignment of interests.
The effects on product offerings and services are profound. The integration of Avalor’s Data Fabric for Security into Zscaler’s Zero Trust Exchange platform enhances AI-driven analytics and decision-making capabilities. Customers will benefit from dynamic prioritization, streamlined reporting, zero-copy analytics, real-time incident mitigation, and advanced threat detection. Employee reactions have been positive, with Avalor's co-founder expressing optimism about the acquisition, highlighting the benefits of Zscaler's extensive resources and customer base. While specific customer reactions are not detailed, the enhanced capabilities and services are expected to be well-received, providing improved security insights and operational efficiencies.
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