As global economic uncertainty remains elevated, businesses across the tech sector are feeling the pinch. While the cybersecurity industry is often touted as one of the more resilient markets, it is still not immune to the impact of macroeconomic challenges as customers tighten their belts.
Layoffs among leading cybersecurity vendors have made headlines in recent months, but other indicators, particularly a customer acquisition slowdown, offer additional warning signs that security vendors are facing business challenges.
Cloud security company Zscaler is one of many vendors grappling with a deceleration in billings as its enterprise customers look to cut spending.
In quarterly earnings call last week, executives at the San Jose, California-based vendor revealed that they expect a 9% sequential decline in billings in the coming quarter due to “new customers being more deliberate about their large purchasing decision,” according to comments from Jay Chaudhry, the company’s founder and chief executive. According to FactSet data, of the 41 analysts who cover Zscaler, 20 lowered their price targets following the call, shedding light on Wall Street concerns over the impact of increased economic headwinds facing the cloud security firm.
Zscaler isn’t the only security vendor finding it harder to lure new customers these days. Okta, a cloud-based identity and access management company, also said in a recent earning call that organizations are becoming more conservative when making long-term purchases, causing the business to shift its focus towards retaining and upselling existing customers rather than acquiring new ones.
One economic expert told SC Media that in this environment, vendors are finding it increasingly difficult to convince newer, cash-conscious customers to take the plunge.
“Most of the organizations we work with are cutting project budgets amid the current economic situation, and they are actively looking ..
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