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ZERO TRUST, AI, CAPITAL MARKETS DRIVE CONSOLIDATION IN CLOUD SECURITYZERO TRUST,
AI, CAPITAL MARKETS DRIVE CONSOLIDATION IN CLOUD SECURITY

Companies that quickly shifted to cloud-native operations are looking for
greater visibility and protection — and AI benefits — while an uncertain
economic future has venture capitalists looking toward safety.

Robert Lemos, Contributing Writer

January 15, 2024

5 Min Read
Source: PeachShutterStock via Shutterstock


Consolidation in the cloud security market is off to a strong start in 2024.

On Jan. 9, privileged access management firm Delinea announced that it had
acquired Authomize, a maker of tools that detect and respond to identity-based
threats in the cloud. The previous week, on Jan. 3, integrated enterprise
security firm SentinelOne disclosed it had acquired PingSafe and that company's
cloud-native application protection platform (CNAPP) to augment its cloud
offerings.

Also on Jan. 3, SonicWall announced its acquisition of Banyan Security, a maker
of zero-trust cloud solutions, as the company aims to keep up with the threats
in the cloud space, president and CEO of SonicWall Bob VanKirk said in a
statement announcing the acquisition.



"Cybersecurity's focus is shifting to more dynamic solutions that can adapt to
the ever-evolving landscape of threats in the cloud age," VanKirk said. "For
years, firewalls have been the cornerstone of cybersecurity defenses. However,
with the rise of cloud computing and secure access service edge (SASE), the
industry is shifting its focus to more comprehensive and flexible approaches."



As companies continue to move more operational infrastructure to cloud services
and platforms, they hope to gain better visibility into both the security of
that infrastructure and the threats targeting their cloud-native operations,
says Charles Winckless, senior director analyst at business intelligence firm
Gartner.

"We're seeing organizations that were moved to the cloud and didn't really
realize it from a security perspective because the business did it, and now
they're trying to get a handle on it," he says. "So this tooling is again
becoming more and more critical."



With demand for better cloud security growing, security players are looking to
consolidation to bolster their offerings, especially in two key areas: products
and services that support zero-trust security architectures and offerings that
make strong use of machine learning (ML) and artificial intelligence (AI).


ZERO TRUST IS NO. 1

SentinelOne's acquisition of PingSafe is not its first deal focusing on zero
trust. In 2022, the company bought Attivo Networks to add identity threat
detection and response technology, which helps mitigate a significant threat in
cloud infrastructure: attackers with legitimate credentials.



Other companies have also focused on boosting their zero-trust credentials.
Cisco acquired Isovalent in December to heighten its visibility into, and
protection of, cloud workloads, and it bought Lightspin in March to bolster its
cloud security offerings.

Companies are shifting to zero-trust features throughout their cloud security
and are looking to their strategic partners to provide those solutions, says Jim
Reavis, CEO and co-founder of Cloud Security Alliance.

"As enterprise consumers made the leap into a cloud-first strategy, they
typically selected a strategic technology partner," he says. "As their needs
grew, they pushed their strategic partners to broaden their offerings, which
often necessitated M&A."

With a crowded cloud-security market and concerns over the economy, many
startups have grown more worried that their runway to financial breakeven has
shortened, leading a growth mindset to give way to consolidation, says Gartner's
Winckless.

"There's an awful lot of vendors out there, and in a time where perhaps the
economy isn't as great for buying products," he says. "With venture capital
investment definitely trending a little lower, some of these companies are going
to need acquisition to continue to be funded."




AI TO THE RESCUE

Businesses are looking to vendors to provide AI features that improve their
visibility into operational assets, identification of threats, and the
efficiency of incident response. Unsurprisingly, vendors are looking for ways to
deliver those benefits.

While zero-trust features are in most demand, companies also don't want to fall
behind in the race to adopt AI for any cloud-security benefits, says CSA's
Reavis. Over the past year, companies have been keeping an eye out for effective
ways to apply AI to cloud security, he says.

"The biggest single area of inquiry we receive is around generative AI and what
we see as the 'copilotization' of cybersecurity solutions," he says.

In December, the CSA launched its AI Safety Initiative to make sure the process
does not undermine the security of the cloud.

The trend will continue in 2024, as companies go beyond just promises and find
practical ways to apply AI to cloud security, says Victor Oribamise, CEO of
Kquika, a data analysis startup focused on the airline and travel sector.

"Expect increased adoption of AI and ML) for threat detection, incident
response, and anomaly identification," he says. "These tools will help sift
through the noise and pinpoint real threats, freeing up human analysts for more
strategic tasks."


COMPANIES CONSOLIDATING FOR LONG TERM

The decision to adopt a "best of breed" technology versus tightly integrated
"good enough" solutions is always on companies' minds, says CSA's Reavis. Yet
the simplification of cloud-security stacks is a secondary factor in the
consolidation we are seeing in the markets today, he says.

"We saw a large influx of capital into cloud-native security solutions in the
lead-up to and during much of the pandemic," Reavis says. "Investors essentially
placed their bets on cloud security, and as capital markets began to tighten in
mid-2022, it has driven a natural consolidation cycle."

The consolidation is not about creating a single cloud security provider for a
business's needs, but more about simplifying operations to provide better
visibility and detection capabilities, says Gartner's Winckless.



"It's not really that [businesses] want to deal with a single vendor — if it
was, there are some obvious candidates who would be doing extremely well in this
space," he says. "I think it is that organizations are looking for sets of
consolidated platforms that reach across multiple domains to get better
visibility and more consistent security."

Whether the most recent buys will lead to more comprehensive and integrated
security will depend on how well cloud security providers such as SentinelOne,
SonicWall, and Delinea do in handling their latest acquisitions, he added.




ABOUT THE AUTHOR(S)

Robert Lemos, Contributing Writer



Veteran technology journalist of more than 20 years. Former research engineer.
Written for more than two dozen publications, including CNET News.com, Dark
Reading, MIT's Technology Review, Popular Science, and Wired News. Five awards
for journalism, including Best Deadline Journalism (Online) in 2003 for coverage
of the Blaster worm. Crunches numbers on various trends using Python and R.
Recent reports include analyses of the shortage in cybersecurity workers and
annual vulnerability trends.

See more from Robert Lemos, Contributing Writer
Keep up with the latest cybersecurity threats, newly discovered vulnerabilities,
data breach information, and emerging trends. Delivered daily or weekly right to
your email inbox.

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