August 19, 2019

ZS, AKAM, Bitglass Inc., CHKP, CSCO, FTNT, Forcepoint LLC, NLOK, PANW, iboss Inc.

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17 sources, comprising 15 Zscaler resellers and system integrators in North America (8), Europe (3), Asia (1), and with global business (3), representing more than $60 million in 2018 Zscaler revenue, and 2 industry sources (1 in North America and 1 in Europe)

REPEAT SOURCES 11 (5 in North America, 3 in Europe and 3 with global business) from OTR Global’s May report

INTERVIEWS July 17 through Aug.13

Long sales cycles and channel issues hindered Zscaler partners' FY4Q19 sales momentum and FY1Q20 pipelines, though the company's competitive and early-market advantage remains intact.

  • FY4Q19 ZS sales at least met goals for 10 of 14 partners, fell below for 4 (vs. 2 of 13 in FY3Q19); growth lagging overall security market for 7 of 11 partners (weaker vs. May)
  • FY4Q19 win rates slightly weaker, deteriorated qq for 3 of 14 partners (vs. 2 in FY3Q19), improving for just 4 (vs. 6 in FY3Q19); some sources, including large partners, reported increased competition among channel partners
  • Pipelines for FY1Q20 in line with expectations for 11 of 14 partners, exceeding for only 1 (vs. 5 of 12 exceeding in May)
  • FY4Q19 ZIA sales at least in line for 9 of 13 partners (vs. 12 of 14 in FY3Q19); ZPA sales below plan for 5 of 11 (vs. 3 of 14 in FY3Q19)
  • Area to Watch: Higher renewal prices driving interest in competitors, especially PANW, CSCO;
    iboss regarded as new challenger
by Jaclynn Anderson