9.1.2Segment

Cloud Security

Cloud security platforms protecting applications, workloads, and configurations in cloud environments.

4
Verticals

Overview

Cloud Security covers the protection of cloud environments — cloud security posture management (CSPM), cloud workload protection (CWPP), and the converged cloud-native application protection platforms (CNAPP) that secure cloud infrastructure, workloads, and applications. It is among the hottest security categories, led by Wiz (acquired by Google for ~$32B), Palo Alto Prisma Cloud, and Orca, alongside the hyperscalers' native tools.

Demand is propelled by the migration of workloads to cloud and the complexity of securing multi-cloud environments, with CNAPP consolidating formerly separate cloud-security tools into platforms. It is consolidating rapidly (Wiz's meteoric rise and acquisition epitomize the category's value) and one of the most heavily-invested and acquired security segments.

Market snapshot

FragmentationConsolidatingEstimate

Not separately classified. The fastest-moving category, and the one most exposed to being absorbed: the hyperscalers ship native security with the infrastructure, so independent vendors must be materially better at multi-cloud than a customer's primary provider is at its own. That is a defensible position for a few and an existential one for the rest.

Business model & economics

Revenue model

Cloud-security platform SaaS subscriptions

Key economics

Recurring revenue
High

recurring cloud-security subscriptions

EBITDA margin
Strong

scaled SaaS economics

Capex intensity
Low

Characteristics

  • CSPM/CWPP converging into CNAPP platforms.
  • Led by Wiz (Google ~$32B), Prisma Cloud, Orca.
  • Among the hottest, most-invested security segments.

M&A deal context

Deal activityHigh

Who’s acquiring

  • Hyperscalers & security platforms
  • Security majors
  • VC- and PE-backed vendors

What’s driving deals

  • Cloud migration and multi-cloud complexity.
  • CNAPP platform consolidation.
  • Mega-deal M&A (Wiz).

Verticals in this segment

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