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Palo Alto Networks Wins ‘Bake-Offs’ Against Cisco, Check Point

Proofpoint ( PFPT ) rebuffed Wall Street concerns that tech spending has slowed this quarter, Piper Jaffray analyst Andrew Nowinski wrote Monday, following last week’s 40,000-attendance cybersecurity RSA Conference in San Francisco. Fears of a tech spending depression slugged IBD’s 25-company Computer Software-Security industry group after dismal outlooks by  Tableau Software ( DATA ) and LinkedIn ( LNKD ) last month. The group hit a 20-month low on Feb. 9 but has since risen 31%. A weak spending outlook did not play out at RSA, Nowinski and William Blair analyst Jonathan Ho wrote Monday in separate research reports. “(Proofpoint) management said they are seeing ‘absolutely no change in the buying environment,’” Nowinski wrote. “Based on our meetings at the conference, we believe demand trends in Q1 have remained strong through the first two months of the year.” Endpoint Pits Symantec, FireEye, IBM Trending buzzwords include endpoint security, internal access management and privileged account management, Nowinski wrote. Symantec ( SYMC ), FireEye ( FEYE ) and IBM ( IBM ) (via a partnership with Carbon Black) compete in the endpoint market. Industry tracker IDC sees endpoint security revenue reaching $4.6 billion in 2016, up 5.4% and accelerating from 2% year-over-year growth in 2015, Nowinski wrote. Despite a marketing refresh, Symantec will struggle against “rapidly growing next-generation endpoint vendors that have demonstrated stronger solutions,” Ho predicted. FireEye, on the other hand, bolstered its threat-prevention capabilities by adding exploit detection to its endpoint. IDC also expects internal access management revenue to reach $5.9 billion in 2016 and grow at an 8% compound annual growth rate through 2019. Within that sector, privileged account management will comprise $550 million, growing at a 10.6% CAGR over the next four years, Ho says. CyberArk Software ( CYBR ) rivals Centrify in the identity access management ring, Nowinski wrote. But Centrify’s tools for securing both privileged accounts and end-user identity give it a broader portfolio than CyberArk, he wrote. During RSA, CyberArk released a new version of its privileged threat analytics system, aimed at stopping “Golden Ticket” attacks which exploit privileged credentials in Microsoft ( MSFT ) domain-level administrator accounts, Ho wrote. Ho also noted that a platform focus continues to buoy Palo Alto Networks ( PANW ), which he says still wins “bake-offs” against Cisco Systems ( CSCO ), Check Point Software Technologies ( CHKP ) and Juniper Networks ( JNPR ). But Check Point’s software-based firewall could be a game changer, he wrote. “Check Point’s software-based firewall appears better positioned than competitors for the upcoming shift to third-party cloud architectures such as AWS ( Amazon ( AMZN ) Web Service) and (Microsoft) Azure,” he said. ‘Spending Has Not Weakened’ Ultimately, the RSA Conference quelled concerns of slowing spending and lengthening sales cycles, Ho wrote. RSA saw 70 first-time exhibitors, giving it 500 companies at the event, and more than 20% growth from 33,000 attendees in 2015. “We observed continued excitement over the space and a strong appetite for new solutions, consistent with prior years,” Ho wrote. “Our discussions with private and public companies suggest that the environment remains robust and that security spending has not weakened near term.” Overall themes included the burgeoning Internet of Things market, encryption, third-party cloud security, identity/access management as-a-service, real-time visibility, next-generation endpoint security, automation/orchestration and leveraging Big Data analytics, Ho wrote. “The conference reinforced our view that the companies best positioned to benefit from increased spending are those that offer innovative next-generation approaches that will see rapid growth in investment,” he wrote. Customers are looking at cost, manageability and vendor consolidation, Ho wrote.

Comedians Mostly Sidestep iPhone Issue, Joke About Facebook Buttons

While Apple ( AAPL ) has garnered the support of the tech industry and civil liberties groups for its stance on smartphone security, the issue appears to have been too complex or serious for most comedians to want to touch. Among the late-night comedians, only Seth Meyers of NBC’s “Late Night” took aim at the subject of smartphone encryption and explained why it’s important that consumers know about it. Meyers devoted a nearly seven-minute segment, called “ A Closer Look, ” of his show to examine Apple’s refusal to unlock iPhones for law enforcement officials. Of course, Meyers couldn’t resist making some jokes at Apple’s expense. “Apple is fighting back against critics and says it has no ‘sympathy for terrorists’ despite refusing FBI orders to unlock private iPhone data. In fact, Apple hates terrorists so much, it’s releasing a new U2 album just for them,” Meyers said. Meyers’ late-night rivals devoted much more time to mocking Facebook ’s ( FB ) new reaction buttons. What follows are recent jokes from America’s late-night comics on issues of science and technology. In addition to Facebook, other targets of jokes included Amazon.com ( AMZN ), eBay ( EBAY ), Fitbit ( FIT ), LinkedIn ( LNKD ), and the humanoid robot Atlas developed by Alphabet ( GOOGL )-owned Boston Dynamics. Joining Meyers in on the fun were Jimmy Fallon, Conan O’Brien, Jimmy Kimmel, James Corden and Stephen Colbert. Conan: In addition to the “like” button, Facebook has now added buttons for “love,” “wow,” “haha,” “sad” and “angry.” In other words, Facebook copied the emotional journey of any Adele album. Kimmel: Facebook today rolled out a new thing called “Reactions.” Now instead of “liking” when a friend’s dog passes away, which is weird, you can be much more thoughtful and sensitive, posting a sad emoji with a giant tear squirting out of its face. Corden: Facebook has launched new alternatives that go beyond its trademark “like” button. Basically Facebook is doing what I tried and failed at with so many women — moving beyond just “like.” Fallon: Some crazy tech news. I saw that a company in Boston built a 5-foot-9 robot that can open doors, and can actually get back up if it’s punched. They didn’t MEAN to test whether it can get up after being punched, but well, it’s Boston. (BOSTON) “Not so tough, are ya, Terminator?” Meyers: Engineers at Boston Dynamics have unveiled a humanoid robot that can withstand getting pushed in the chest with a hockey stick without falling over. Which is definitely the most Boston way to test a robot. Conan: In France, a robot has been programmed to develop its own taste in art. The robot’s favorite paintings? Naked robots. Conan: Chase bank ATMs are getting a new feature that will allow customers to withdraw cash without using a card. The feature is called “a crowbar.” Conan: A recent study found that bottlenose dolphins sometimes murder other dolphins. However, police say it’s easy to find the culprit because dolphins love to squeal. Fallon: This is a little controversial. I saw that Oral Roberts University is now telling students that wearing Fitbits is mandatory, and logging less than 10,000 steps a day will affect their grades. So finally, some good news for students doing the walk of shame. “12,000 steps — zero regrets!” Meyers: President Obama posted on LinkedIn today about his first job — scooping ice cream. He’s the first president to post on LinkedIn — other than, of course, Abraham LinkedIn. Meyers: A recent study suggests that it’s harder to concentrate in the winter. Said researchers, “For example, this study was supposed to be about traffic accidents.” Colbert: You guys like the website Amazon.com? It’s like eBay, but the things you buy don’t arrive smelling like cigarettes. Colbert: Amazon’s always been on the cutting edge. From drone delivery, to automated warehouses, to shipping six AA batteries in a box the size of a mini fridge. Colbert: Amazon is planning to open hundreds of actual physical bookstores. That’s exciting because you don’t see those much anymore and I think this could be the start of a whole trend of online retailers going real-world. For example, Tinder could open a singles bar, where everybody walks around stating their height.

Palo Alto Networks Q2 Beats Amid Market Share Gains

Palo Alto Networks ( PANW ) stock rocketed Thursday as the cybersecurity firm’s model of providing a simplified product boosted market-share gains and helped fiscal Q2 results as well as Q3 sales guidance top projections. For its fiscal Q2 ended Jan. 31, Palo Alto’s earnings per share soared 110.5% to 40 cents, beating estimates by a penny. Sales jumped 54% to $334.7 million, above views of $318.3 million. Both measures, however, decelerated for the second consecutive quarter. Shares closed up 9.7% and rallied another 4% in after-hours trading. Customers aren’t interested in puzzle-piecing together their security solution, CEO Mark McLaughlin said on a conference call. That platform focus drove Palo Alto to add 2,000 new customers to its 30,000-strong client base. He also noted a “paradigm shift” from reactive security to the platform. ‘Buying All Elements’ “People are not interested in adding one more agent onto the endpoint,” he said. “So simplified on the endpoint is a driver and it’s very analogous to when people say, ‘Hey, I don’t want firewall and plus, plus, plus (more products).” Billings also surged 62% to $459 million during Q2 as customers began “buying all elements of our platform,” CFO Steffan Tomlinson said on the call. Subscription revenue of $84.3 million grew 68% vs. the year-ago quarter. “We’re seeing customers standardizing on our platform,” McLaughlin said. And with that, “they’re adopting a lot more subscription services than they have in the past.” Current-quarter sales guidance for $335 million-$339 million topped analyst forecasts for $334.9 million, but Palo Alto’s EPS ex items outlook for 41-42 cents missed Wall Street expectations for 45 cents. The company’s Q3 sales would be up 44% at the midpoint of guidance, and EPS ex items would rise 80% at the midpoint. But both metrics would also decelerate for the third consecutive quarter. On a seasonal basis, Q1 and Q3 tend to be weaker, Tomlinson said. While McLaughlin said security remains a top priority globally, IBD’s 41-company Computer Software-Security group has fallen 20% year to date. Over the same time period, Palo Alto Networks stock has lost 26%. McLaughlin acknowledged the stock shake-up — likely related to disappointing guidance from tech firms like Tableau ( DATA ) and LinkedIn ( LNKD ) — but said there’s nothing to indicate the macro environment will play out along stock market lines. Taking Market Share Palo Alto also appears to be swiping market share from Cisco ( CSCO ), Check Point Software Technology ( CHKP ), Fortinet ( FTNT ) and Juniper Networks ( JNPR ), McLaughlin said. Of the $300 million in added 2015 revenue across the five vendors, Palo Alto accounted for $120 million. “The average is $58 million,” he said. “I think it’s very obvious we’re taking share from everyone in the space for the math to work out that way.” During Q2, Palo Alto also announced a data-sharing partnership with Proofpoint ( PFPT ), similar to a deepened IBM ( IBM )-Check Point alliance unveiled Thursday. The Palo Alto-Proofpoint alliance will drive automated and coordinated protection across Palo Alto’s platform, Proofpoint’s targeted attack protection and SocialPatrol. The Big Picture Customers are fed up with cybersecurity vendors that try to monetize data threat intelligence, McLaughlin said. “The big picture is the way we monetize intelligence is in the platform itself,” he told analysts. “The more intelligence we have in the platform, the better job we do. And we have an insatiable desire for platform intelligence.” He added: “You better be able to take intelligence and put it in your platform, and do something with it. That’s where the value will lie.”