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Cisco vs. Palo Alto Networks security sales revenue comparison

Gartner's opinion of Cisco? "Does not effectively compete." Ouch, now that's got to hurt the Cisco CEO's plan for security dominance.

Hummelstown, PA:   Wed, 11/27/13 - 11:59pm    View comments
 

CiscoSourcefireEarlier this month the CEO of Cisco bragged about his plan for security dominance:

"Overall, security revenues grew 8%, with particular strength in network security, up 12%. We closed the Sourcefire acquisition on October 7th and are already seeing the benefits of a focus and the assets we fully acquired.

"Security is our customers' top priority and according to them, we may be the only company capable of providing the full architecture they need to address their security challenges. We're off to good start and it's up to us to execute on this architecture."

So year-over-year, Cisco grew its Q1 security revenue by $27 million.

Palo Alto NetworksMark McLaughlinThen Mark McLaughlin the CEO of next generation firewall vendor Palo Alto Networks offered his take as to what the impact has been for Palo Alto after Cisco acquired Sourcefire:

"I think to the extent there's any impact at all, it's been positive for us. And that's primarily because we handily beat Cisco when we face them. We've beat Sourcefire in head-to-head competitions as well.

"And taking an IPS technology and bolting it on a stateful inspection firewall is not a fundamental disruptive technology change. So I don't think it changes anything from a technical solution perspective.

"We've also seen confusion in the market from the Sourcefire customers about what that means. What's going to happen to them over time. And we've been able to develop hundreds and hundreds of leads from dissatisfied or confused Sourcefire customers. So at least from our perspective, it's been a positive."

"Also in the quarter, our wins against legacy competitors included one of the largest oil and gas companies in the world, where we're replacing Check Point and Cisco.

So year-over-year, Palo Alto grew its Q1 security revenue by $42.246 million.

Quarterly dollar revenue comparison: Cisco vs. Palo Alto Networks (without frames)

Source: U.S. Securities and Exchange Commission

Fiscal year dollar revenue comparison: Cisco vs. Palo Alto Networks (without frames)

Source: U.S. Securities and Exchange Commission

When comparing Q1 year-over-year revenue by dollars, Palo Alto Networks grew dollar revenue +56% more than Cisco, which in my opinion is amazing because Palo Alto started from a dollar revenue base that was -74% smaller than Cisco.

GartnerPerhaps forebodingly for the Cisco CEO and his plans for security dominance, Gartner states:

"Cisco is assessed as a Challenger for enterprises over the evaluation period, because we did not see it frequently displacing Leaders based on vision or feature, and it does not effectively compete in the NGFW field that is visible to Gartner."

Gartner's opinion of Cisco?

"Does not effectively compete."

Ouch, now that's got to hurt the Cisco CEO's plan for security dominance.

2013 Magic Quadrant for Enterprise Network Firewalls

2013 Magic Quadrant for Enterprise Network Firewalls

Gartner continued:

"Instead, Gartner sees Cisco winning mostly procurements through sales/channel execution or aggressive discounting for large Cisco networks when firewall features are not highly weighted evaluation criteria (that is, as part of a solution sell in which security is one component).

So what's Gartner's take on Palo Alto?

"Palo Alto Networks continues to both drive competitors to react in the firewall market and to move the overall firewall market forward.

"It is assessed as a Leader, mostly because of its NGFW design, direction of the market along the NGFW path, consistent displacement of competitors, rapidly increasing revenue and market share, and market disruption that forces competitors in all quadrants to react."

What will be Sourcefire's fate under the ownership of Cisco?

Will Sourcefire experience layoffs and revenue declines much like NDS has now suffered after only 1-year of ownership by Cisco?

Related stories:

Confidential slide presentation on Sourcefire acquisition by Cisco

Unconfirmed rumor Cisco offered $2.5 billion to buy Palo Alto Networks and was turned down

View the insiders cashing in IPO shares at Palo Alto Networks

Cisco's developing a next generation firewall (NGFW)

Palo Alto Networks is the culprit behind Cisco's -8.4% FY11 security sales decline
 


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