Palo Alto Networks And IBM Forge Strategic Partnership To Enhance AI-Powered Cybersecurity Solutions
$PANW
Palo Alto Networks (NASDAQ:PANW), a global leader in cybersecurity, has announced a strategic partnership with IBM (NYSE:IBM), a prominent provider of hybrid cloud and AI solutions. This collaboration aims to deliver AI-powered security outcomes for customers, leveraging the strengths of both companies in addressing the complex cybersecurity challenges posed by digital transformation and the rapid growth of AI. The partnership will see Palo Alto Networks acquiring IBM’s QRadar Software as a Service (SaaS) assets, including intellectual property rights, subject to customary closing conditions. This acquisition will facilitate the migration of QRadar SaaS clients to Palo Alto Networks’ Cortex XSIAM platform, which offers advanced AI-powered threat protection. On-premise QRadar clients will continue to receive support from IBM, ensuring a seamless transition for those who choose to migrate to Cortex XSIAM.
Additionally, IBM will receive incremental payments from Palo Alto Networks for QRadar on-prem clients who opt for the migration. Nikesh Arora, Chairman and CEO of Palo Alto Networks, emphasized the transformative potential of AI in the security industry, stating that the partnership with IBM will accelerate growth and innovation. Arvind Krishna, Chairman and CEO of IBM, highlighted the significant benefits of the partnership, including advanced threat protection and automation, which will speed up the adoption of next-generation security operations for clients and partners. IBM Consulting will become a preferred Managed Security Services Provider (MSSP) for Palo Alto Networks customers, featuring a joint Security Operations Center and a Cyber Range for immersive customer experiences. IBM’s global, regional and local delivery capabilities, combined with watsonx, IT automation and threat intelligence, will enhance advisory efforts and drive the growth and adoption of Palo Alto Networks’ security platforms.
The collaboration will also see the training of over 1,000 IBM security consultants on the migration, adoption and deployment of Palo Alto Networks products. Internally, IBM plans to expand its deployment of Palo Alto Networks’ AI-powered security platforms, adopting Cortex XSIAM for next-generation security operations and Prisma SASE 3.0 for zero-trust network security. This adoption will safeguard IBM’s global workforce and streamline security operations across the Palo Alto Networks portfolio. Furthermore, Palo Alto Networks intends to integrate watsonx large language models (LLMs) into Cortex XSIAM to enhance automation capabilities and improve customer support outcomes. Through this collaboration, IBM will also expand its relationship with Prisma Cloud, Palo Alto Networks’ comprehensive cloud-native application protection platform.
This expansion will strengthen “secure-by-design” DevSecOps capabilities for joint customers, preventing insecure code from running in cloud workloads in production. The transaction is expected to close by the end of September 2024, pending regulatory approvals and other customary closing conditions. Palo Alto Networks is set to report its third-quarter fiscal 2024 results on May 20. The company projects revenues in the range of $1.95-$1.98 billion, suggesting a year-over-year increase of 13-15%. The Zacks Consensus Estimate is pegged at $1.97 billion, indicating growth of 14.3% from the year-ago reported figure.
Non-GAAP earnings are expected to be in the range of $1.24-$1.26 per share, with the consensus estimate at $1.25 per share, reflecting an increase of 13.6% from the previous year’s earnings. Palo Alto Networks’ third-quarter performance is likely to benefit from strong demand for its form factor hardware products, particularly machine learning-powered models that ensure zero-trust network security. The accelerated migration to the cloud in a post-pandemic era is expected to boost the adoption of these platforms. The company’s fiscal third-quarter performance is also anticipated to be driven by the rising demand for cybersecurity solutions due to escalating cyberattacks in a hybrid working environment.
The normalization of the supply chain has further aided growth across the Products, Services and Subscription segments. The firm’s strong back-to-back quarterly performances reflect its sustained focus on product innovation, a shift to subscription-based services, platform integration and continued investments in its go-to-market strategy. The strategic partnership between Palo Alto Networks and IBM marks a significant step in addressing the evolving cybersecurity landscape. By combining their strengths in AI and cybersecurity, the two companies aim to deliver comprehensive, AI-powered security solutions that will enhance threat protection and streamline security operations for their customers. This collaboration is expected to drive innovation and growth, positioning both companies at the forefront of the cybersecurity industry.
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