Palo Alto Networks’ CEO, Nikesh Arora, talked about the company’s emphasis on a “platformization” strategy in an interview with CNBC’s Jim Cramer after the company posted good profits on Monday.
Arora emphasized the importance of adopting a platform-based approach, explaining that once a company moves away from traditional point solutions to an integrated platform, there’s no turning back. He noted that this strategic shift is crucial for maintaining a technological edge and gaining long-term competitive advantages. The company’s strategy involves bundling its products and services into a cohesive platform, a move that led to a reduction in full-year guidance earlier this year. However, Arora expressed enthusiasm about the progress of this strategy and indicated that he wished the transition had occurred sooner.
In the earnings presentation, Palo Alto Networks highlighted that recent success was driven by the early momentum in platformization, reflecting positive results from this strategic approach.
Additionally, Arora shared that the company has made significant strides in artificial intelligence, with Palo Alto Networks surpassing $200 million in annual recurring revenue from AI services.
Following the earnings report, Palo Alto Networks’ stock experienced a notable increase, rising more than 2.5% in after-hours trading, signaling positive investor sentiment and confidence in the company’s evolving strategy and growth prospects.
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