Tomasz Tunguz - The First $100m ARR AI Security Company
Tomasz TunguzVenture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. The First $100m ARR AI Security Company
Palo Alto Networks, the largest security software company in the world, worth roughly $82b, announced earnings this week. There are three interesting themes :
They have developed a $100m ARR security line in a few quarters :
In addition, AI is enabling them to reduce their service costs by 50%, which is similar to the productivity gains ServiceNow reported.
The company embarked on a suite strategy 5 years ago to capture more customer budget by cross-selling products. Since then, Palo Alto has acquired 16 companies. That idea works …
…but only up to a point. The return on the investment has to materialize :
In addition, the practical realities of swapping out products is real :
To ease the transition, Palo Alto Networks is selling the products at half-price the first year :
Buying out contracts requires a large balance sheet & multiyear deals. It enables growth in competitive market share. But it does depress the growth rates at least temporarily. We will see many more of these suite companies that build internal tools or acquire new capabilities. The potential for budget capture is big (40x!) but the path to platforms isn’t always easy.. |
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Nobody Knows : Steel & Blockchains
Tuesday, February 20, 2024
Tomasz Tunguz Venture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. Nobody Knows : Steel & Blockchains Asking “What problems
Building a $20b Behemoth : Office Hours with Steven Goldfeder of Offchain Labs
Monday, February 19, 2024
Tomasz Tunguz Venture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. Building a $20b Behemoth : Office Hours with Steven Goldfeder
One of the Biggest Public Offerings in 20 Years
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Tomasz Tunguz Venture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. One of the Biggest Public Offerings in 20 Years The Bitcoin
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Tomasz Tunguz Venture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. The Sudden Repricing of Startups in Early 2024 We're
AI Design Patterns
Monday, February 5, 2024
Tomasz Tunguz Venture Capitalist If you were forwarded this newsletter, and you'd like to receive it in the future, subscribe here. AI Design Patterns As we've been researching the AI
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