In less than 20 years, Palo Alto Networks has grown from a startup into a $40 billion corporation, and much of that growth has been through acquisition. The Santa Clara, California-based cybersecurity company has purchased 17 companies, each of which boasted either complementary technologies or new capabilities with little to no integration needed. Chairman and CEO Nikesh Arora, himself a former Google executive, has led the company through many of them. The common thread? They are all among the best in their class.
Arora has noted that its forerunners in security, McAfee, Juniper Networks, and Cisco, were all strengthened by acquisitions, so he isn’t necessarily following a secret recipe for success. Palo Alto has spent about $4 billion on its acquisitions, according to the CEO — 10% of its current market cap. And although he hasn’t indicated how the company will follow-up its most recent acquisition, Cider Security for $195 million, he will follow a similar path to make that decision. The enterprise must offer either unique capabilities or ones his company missed out on initially, which will keep its growth moving in the right direction.