Palo Alto Continues to Make Progress With New Strategy. Is Now the Time to Buy the Stock?
Palo Alto Networks' (NASDAQ: PANW) 2025 has started out better than its 2024, when the stock plunged following its fiscal second-quarter 2024 results. A year ago, the company commenced its new "platformization" strategy to move customers to one of its three cybersecurity platforms and away from point solutions.At the time, the company said its customers were experiencing "spending fatigue" as they weren't seeing enough incremental benefits from adding new point solutions from disparate vendors. To counteract this, the company set out to have its customers standardize on one of its platforms. However, to convince customers with multiple single-problem solutions from various vendors with different contract lengths to do this, Palo Alto agreed to give customers solutions for free. This meant that clients didn't have to pay for the same solution from two different vendors at once. While this was a bold move, it would also negatively affect Palo Alto's billings and revenue growth over the next 12 to 18 months. The company said that the program would be the equivalent of giving free product capabilities away to customers for six months.Continue reading
Palo Alto Networks' (NASDAQ: PANW) 2025 has started out better than its 2024, when the stock plunged following its fiscal second-quarter 2024 results. A year ago, the company commenced its new "platformization" strategy to move customers to one of its three cybersecurity platforms and away from point solutions.
At the time, the company said its customers were experiencing "spending fatigue" as they weren't seeing enough incremental benefits from adding new point solutions from disparate vendors. To counteract this, the company set out to have its customers standardize on one of its platforms. However, to convince customers with multiple single-problem solutions from various vendors with different contract lengths to do this, Palo Alto agreed to give customers solutions for free. This meant that clients didn't have to pay for the same solution from two different vendors at once.
While this was a bold move, it would also negatively affect Palo Alto's billings and revenue growth over the next 12 to 18 months. The company said that the program would be the equivalent of giving free product capabilities away to customers for six months.
