New Zscaler Services Target Growing Threats

Zscaler (Nasdaq: ZS) this week unveiled several enhancements designed to improve the granularity and efficiency of its zero-trust platform. The new services highlight the software-as-a-service (SaaS) provider’s momentum as cybersecurity threats proliferate.

At its Zenith Live 2022 user conference in Las Vegas, Zscaler introduced new artificial intelligence/machine learning (AI/ML) capabilities for its Zero Trust Exchange platform that are designed to stop phishing attempts, simplify user-to-application segmentation, streamline policy-making and policy adaptations, and identify root causes of user problems.

The vendor also released a Posture Control service to identify security risks within the continuous integration and continuous delivery (CI/CD) process used to create and maintain applications in cloud environments.

And as part of an expanded relationship with AWS, Zscaler has deepened the integration of its platform services across AWS workloads. It’s ported Posture Control to AWS. And it’s extended zero-trust access to mobile devices attached in private 5G networks created with AWS Wavelengths – the AWS technology that extends AWS functionality to carrier cell sites or points of presence (PoPs).

Zscaler Addresses Ransomware

Zscaler’s announcements come on the heels of industry reports focused on dramatic increases in cybersecurity threats. A report released by Zscaler earlier this month, for instance, states ransomware to be the top tactic used by hackers in 2022 – and the most damaging. By 2024, the company predicts damages from ransomware supply chain attacks, multiple-extortion attacks, and ransomware-as-service will rise to $42 billion. Ransomware attacks have already increased 80% between February 2021 and March 2022, Zscaler maintains.

Late last year, Zscaler reported a 314% increase in attacks on encrypted traffic. And in April 2022, the vendor reported that phishing attacks were up 400%, with retail and wholesale enterprises at highest risk.

Interestingly, Zscaler characterizes its announcements as SSE (security service edge) offerings. SSE is yet another Gartner acronym, this one reportedly referring to a subset of secure access service edge (SASE). Simply put, SSE is SASE without software-defined wide-area networking (SD-WAN) or WAN control. It’s a term that’s been popping up in various press releases these days, sometimes displacing former claims of SASE. Notably, Zscaler also claims to be a SASE platform as well as a deliverer of SSE.

Onward, Upward, Outward

Zscaler’s expansion reflects its ongoing success, even in the face of increased competition from startups such as Perimeter 81 as well as from established players such as Akamai (Nasdaq: AKAM), Axis Security, Cato Networks, Cisco (Nasdaq: CSCO) , Google, Juniper Networks (NYSE: JNPR), NetFoundry, NetSkope, Okta (Nasdaq: OKTA), and VMware (NYSE: VMW), to name a few.

In its latest third-quarter 2022 earnings report, Zscaler posted quarterly revenues of $287 million, up 63% year-over-year and 12% sequentially. The quarter ended April 30, 2022, was the third consecutive quarter to see revenue increases over 60%. For the fourth quarter of fiscal 2022, Zscaler expects revenue from $304 million to $306 million, reflecting year-over-year growth of 54% to 55%.

Clearly, Zscaler is leading in a winning segment. But that segment is growing increasingly complex as attack vectors expand. Keeping up with bad actors is expensive and challenging. Still, judging by its recent earnings and service releases, Zscaler is showing that so far it’s up to the task.