Guest contribution by Anirudh Sure, Director, Mergers & Acquisitions, Zscaler
As new beginnings go, a new job is a fairly tumultuous time, especially when the industry you join gets thrust into the global spotlight days before you log into your newly imaged laptop. I’m referring to the CrowdStrike outage this summer and how it brought access and resilience to cloud-delivered services to the forefront of every CXO and IT leader’s mind.
After a decade in M&A consulting, I joined Zscaler as one of the newest members of the growing M&A/D Value Enablement team because the Zscaler platform is fundamentally changing the way M&A/D integrations and separations are executed. My belief is that it is only going to get bigger and better as innovations continue to deliver new value to clients.
One early observation is that the Zscaler Zero Trust Exchange has a lot more to offer than what the majority of our clients use. As a newbie seeking clarity and answers, I decided to meet with some of our CXOs in Residence (former client executives) and current client-side leaders. With learnings in hand, I’ll share my understanding of Zscaler capabilities with respect to M&A/D and the unique benefits for our clients.
A category of one
Zscaler has an impressively comprehensive platform with growing AI-backed capabilities that can be leveraged in various permutations to serve the specific needs of our clients. The company has grown well beyond its initial value proposition of direct-to-cloud connectivity and security. A sentiment shared by multiple CXOs who have successfully leveraged our platform is that, technically, we should not even be trying to compete with networking point solution product providers. These companies served an important purpose for the past few decades, selling appliances like firewalls and VPNs that were indispensable for secure connectivity across legacy networks. However, as networking and security evolve to become more cloud-centric, such point solution products are only holding clients back, decelerating their modernization journey. Trying to squeeze outmoded point solution products into modern direct-to-cloud networks is like attempting to add a carburetor to an electric car.
Even the one or two network products in the market that have a more modern value proposition fall severely short of matching our platform capabilities in terms of maturity, stability, and scalability. This is especially true from an AI competency and M&A/D value enablement perspective, due to our AI-backed holistic, simple, and speedy integration and separation capabilities. So, it’s not really a stretch to say that Zscaler is indeed in a “Category of One”, without much competition of note.
Penetrating a market concentrated with legacy solutions
It takes a lot of courage for a leader to change vendors for capabilities as sensitive as security and connectivity, especially if the old way of doing things seems to be sufficient. Zscaler focuses on developing long-term relationships with current and prospective clients, educating them about our platform’s capabilities. These relationships give us valuable insights into the specific challenges each organization is looking to overcome, allowing us to recommend the right set of Zscaler products at the right time.
And when we do engage with customers, we focus on identifying the right stakeholders to discuss Zscaler’s potential value to their organization. Our ideal client-side stakeholder is a CXO focused on the organization’s overall transformation or growth trajectory, including both technical and non-technical leaders. Once the transformative power of our capabilities is understood, it is common that our customer champions also get buy-in from non-technical leadership personas like the COO or the CFO.
We also help new customers understand how a new system will affect their resources. Technical leaders are often worried about losing important resources when the organization replaces old, complicated systems with Zscaler. Additionally, Zscaler Big 4 and GSI partners might see easier buy-in from clients for programs leveraging legacy products, due to their brand recognition. We focus on helping prospective clients break through these impediments to understand how we improve existing job profiles and add value to each role, not replace them. We also keep working to build awareness among the Big 4 and GSI partners of the long-term benefits of using Zscaler. This will help them improve their client relationships.
Supporting M&A and corporate development
Many of the most successful mergers and acquisitions in recent times have relied on Zscaler’s leading-edge platform to significantly simplify and speed up integrations and separations while future-proofing modernization. While it is great that this secret weapon has helped so many, we are not a traditional M&A solutions provider in the marketplace. That translates to a sizable opportunity for me and my team to partner with CXOs and partners in the ecosystem to showcase the differentiated value proposition that has reduced risks and costs for the world's top organizations as they went through transactions.
Mergers, acquisitions, and divestitures are some of the most disruptive inflection points in an organization’s journey. However, a common sentiment among CXOs in customer organizations who have used our platform for acquisitions or carve-outs is that they are no longer fearful of future transactions because of how our platform simplifies value capture and accelerates value creation, while dramatically improving user experience. Our CXOs in Residence can effectively tell potential clients this message, using their own experience with using Zscaler for M&A.
There are two broad sets of goals for any M&A transaction - 1) Driving Synergies and 2) Executing the integration or separation. Zscaler makes a difference in both goals. This helps both technical and non-technical leaders achieve their goals. The M&A/D Value Enablement team engages all senior leaders sponsoring a transaction, rather than just focusing on the CIOs and CTOs.
Moreover, instead of over-indexing on the obvious architectural simplification and risk reduction benefits of Zscaler, we also showcase the improvements in user experience and M&A-driven business agility for serial acquirers because we understand that M&A-based growth targets require holistic buy-in and partnership from all portfolio leaders within the organization.
Thank you to Sean Cordero, Sebastian Kemi, and Dan Shelton from the CXOs in Residence team, as well as trusted CXO Advisors, Yves Le Gelard and Andrew Baker, for sharing their thoughts for this article. Learn more about Zscaler’s M&A/D offering and view sample case studies from over 400 clients that we have helped go through M&A/D transactions in the last four years.