Seeking Alpha

Palo Alto buys cybersecurity startup, looks to take on FireEye

  • Palo Alto Networks (PANW +4.5%) has bought Morta Security, a cybersecurity startup in stealth mode, for an undisclosed sum. (PR)
  • Palo Alto asserts Morta's team "brings additional valuable threat intelligence experience and capabilities," and suggests it will help develop (together with Palo Alto's next-gen firewalls and security services) a comprehensive platform for the burgeoning cybersecurity market.
  • Palo Alto suggests such a platform would mesh security controls, traffic/port/protocol inspection, threat detection and analysis, and automatic policy changes to deal with new and unknown threats, and would thus be superior to traditional point solutions that "address only specific types of attacks, or phases of the attack."
  • The purchase comes less than a week after FireEye (FEYE) announced the acquisition of leading endpoint security and incident response software/services firm Mandiant for $1B+, with the goal of creating an unmatched cybersecurity platform.
  • While Palo Alto (naturally) asserts firewalls should act as "the core enforcement vehicle within the network" for cybersecurity, FireEye offers dedicated threat-prevention hardware that interacts with firewalls.
  • PANW +3.8% AH. FEYE -0.4%.
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Comments (7)
  • Ta0
    , contributor
    Comments (468) | Send Message
     
    The important consideration in all of this is who will be providing the security for the upwardly mobile, mobile market (tablets, smartphones, phablets, wrist alerts, ring alerts, jawbone alerts, etc.) which is growing leaps and bounds into the near and far future. Psychic monkey tells me that this is where the smart money will gravitate towards. In any case, I am very LONG both PANW AND FEYE.
    6 Jan 2014, 07:52 PM Reply Like
  • El-surf-gato
    , contributor
    Comment (1) | Send Message
     
    Isnt Feye a major competitor with PANW?
    7 Jan 2014, 04:31 AM Reply Like
  • tomlos
    , contributor
    Comments (1173) | Send Message
     
    No they are not. FEYE created the space that PANW is trying to get a piece of. PANW does firewalls, and realizes there is a big big market in next generation threat protection. They are doing what they can to stay relevant. This isn't very exciting for the next generation threat protection space (this acquisition).
    7 Jan 2014, 08:11 AM Reply Like
  • Ta0
    , contributor
    Comments (468) | Send Message
     
    Speaking strictly on the technology---the two companies are focused on different aspects and in different ways. With all due respect, FEYE did not "...created the space that PANW is trying to get a piece of" simply because they are doing different things and in very different ways.

     

    FEYE's technology hangs out between all the traffic and the firewall and tries to intercept all the bad stuff before it even hits the firewall. It is very proactive and is quite effective, but you can't just use it alone without a firewall, because it cannot catch everything from the outside, and it certainly cannot catch what might hit from the inside.

     

    PANW's technology IS the firewall, and allows the network security team(s) to access fine details of the control functions of the PANW firewall, something that was never possible before PANW came on the scene. This access allows for increased visibility into, and more granular control over what traffic is or is not allowed on a network. Moreover, the company that PANW just acquired is a cyber security startup founded by former NSA engineers, which means they will also be doing (not just network but also) cyber security. So, not only are they VERY relevant, they are extremely exciting for next generation threat protection.
    7 Jan 2014, 11:03 AM Reply Like
  • Ta0
    , contributor
    Comments (468) | Send Message
     
    @El-surf-gato, PANW did develop, as part of their firewall offering, a product called WildFire, which acts in a very similar manner to FEYE's product. In this sense, they are competitors, but FEYE is not a firewall producer, whereas PANW's product is definitely a firewall hardware/software package with subscriptions for regular protection updates which are very important because attacks change constantly and the protection needs to stay ahead of the curve. PANW's real competitors are in the firewall hardware/software market, such as Cisco, Checkpoint, & Juniper, whereas FEYE's real competitors are Damballa, Sourcefire, etc.
    7 Jan 2014, 11:29 AM Reply Like
  • berniespear
    , contributor
    Comments (240) | Send Message
     
    Definitely agree that these stocks will be hot this year with all the hacking going on.

     

    Who does the governments cyber security?
    17 Jan 2014, 07:12 PM Reply Like
  • Ta0
    , contributor
    Comments (468) | Send Message
     
    Berniespear, my bet is on PANW, for various reasons, not the least of which is that Morta used to work with the NSA in some capacity.
    18 Jan 2014, 12:17 AM Reply Like
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