Security Money: Of Course Okta Should Be In The Index - BSW #374

12/3/24 •

Summaries by topic

• English

The cyber security index recovered this quarter due to CrowdStrike's recovery and a strong November market, showing signs of the sector heating up again. The podcast discusses the index performance, including top and bottom performers, as well as recent funding rounds, layoff trends, and acquisitions within the private and public sector, indicating a potential shift towards profitability and a growing focus on human risk management and AI-related security.

Cyber Security Index Performance

• 00:00:03 The cyber security index recovered this quarter, primarily due to CrowdStrike's recovery from a previous outage and a strong overall market in November. Okta replaced DarkTrace in the index, reflecting a shift in the market landscape. The index's performance is approaching the NASDAQ, indicating a potential resurgence in the cyber security sector.

Funding & Profitability

• 00:07:22 Funding in the cyber security sector has increased significantly, reminiscent of Q1 2022, potentially fueled by economic stabilization and post-election optimism. The industry is also transitioning from a 'revenue at all costs' model to a focus on profitability, with more security vendors showing consistent positive earnings.

Layoff Trends in Tech

• 00:12:38 Major tech companies, including Intel, Dell, and Cisco, announced significant job cuts in Q3, a trend that shows no signs of slowing down. While the specific areas impacted by these layoffs are still unclear, initial analyses point to a potential reduction in middle management positions, with individual contributor roles still in demand.

M&A Activity in Cyber Security

• 00:21:59 Several notable acquisitions have occurred within the cyber security space, including Mcafee's purchase of Code 42 and Awar, and Mastercard's acquisition of Recorded Future. These acquisitions signify a growing trend of consolidation and a potential shift toward building comprehensive security portfolios and services to address evolving threats.

Private Companies & Investments

• 00:16:32 Private cyber security companies have attracted significant investments, particularly around Black Hat. Kiteworks received a $456 million investment, potentially a precursor to a buyout by Insight Partners, which often leads to future IPOs. Other notable private companies receiving significant investment include Cribl, Abnormal Security, and Vanti.