ZS announcements

Or, one can conclude, having the most data centers of all the cloud titans is not a basis for trying to recreate what Zscaler does, even with the software power that Microsoft bring to the table

Tinker,

I don’t think Azure or AWS is going to enter into the security market, at least no in the near-term. Having said that, if a cloud provider is to implement the same architecture solution similar to ZS for their cloud hosted applications then they don’t need 150 locations but at the edge of their DC’s will be sufficient, something similar to the firewall. After all that’s the point which needs to be protected.

However, ZS is not just addressing that but a user connecting from his device and probably skipping the corporate firewall and reaching the SaaS application. In the olden days, DOD’s of the world had a simple solution, either you work on-premise or you VPN into the system. Now ZS has done the same by using proxy routing all the traffic first to their cloud based firewall.

I know you consider ZS has a ground breaking architecture, etc. All I am saying is, the competition will catch up to this pretty quickly.

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All I am saying is, the competition will catch up to this pretty quickly.

That is pretty much what they said about Palo Alto in 2010 as well. What was so special about what they were doing? To date, apparently quite a lot.

If Palo Alto was looking to “catch up” with Zscaler, then why are they say proxies are the wrong solution. No, we need network and routing, as their current appliances run on.

What Zscaler competes against is legacy vendors bolting on cloud solutions on the edge. If the world sticks with the Palo Alto NGFW paradigm then Zscaler will hit a wall and the investment will fail. If, however, the world decides over time (as they did with NGFWs starting about 9 years ago) that they will move from the legacy to the new platform, then ZS will be a successful investment.

Tinker

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The word I used twice as a descriptor of ZScaler’s scale was architecture (scale). The architecture is the physical distribution of those sites to, as you correctly identified, reduce latency of distance. It is a major component to ZScaler, I’m not saying it, the company and experts are.

ZScaler is a firewall by proxy for enterprises to securely send and receive data over the internet without getting anything nasty onto their internal systems or corrupt their applications.

I was using AWS only for context of physical distribution and number of data centers. The fact that I used AWS was because they have the most data centers and the greatest distribution of the public data centers.

AWS itself as a company or as a destination was completely irrelevant. It was simply an analogy. If a company, any company or even AWS itself wanted to set up a ZScaler competitor to sell to enterprises a proxy firewall platform and they were to only spin up the required servers on AWS locations, they would be well behind the physical distribution architecture scale that ZScaler has set up to provide that service to its customers.

ie, they would start out at a much higher latency to many would be customers, a serious competitive disadvantage to what ZS has built. A network purpose built for hosting a Secure Web Gateway. AWS has built their network the way they have for an entirely different purpose.

I’m not sure what the obsession is for only AWS traffic. There is AWS traffic on ZS, but it is a small percentage of overall traffic.

On the analyst day slides you can see the top few sources of the traffic. O365 at around 25%, YouTube 10%, Facebook 5%, and Salesforce about 1%. Then everything else.

ZScaler is between a business and the internet, not between AWS and the world.

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I’m not sure what the obsession is for only AWS traffic.

You brought AWS into the conversation and said ZS has scale over (or compared to) AWS. Which is not true.

Now you are saying it is architecture… I am not even sure what you are trying to say here…

If you are saying ZS has scale because of # of data centers it has is more than AWS and somehow it is superior… I just don’t get why that is even relevant?

What should be really relevant is, ZS needs to continue to make these investments and continue to expand that footprint.

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To give some context I believe that AWS operates 69 availability zones(data centers). AWS wouldn’t be able to match the architecture scale of ZScaler.

You must be seriously kidding or that’s pretty naive. Amazon CloudWatch monitors exponentially more end-points (of course all of that is within AWS environment) than ZScalar…

Now you are saying it is architecture…

As you can see where you quoted me. I led with architecture.

And so does ZScaler.

https://www.zscaler.com/products/cloud-architecture-security…

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All I am saying is, the competition will catch up to this pretty quickly.
_____

I think the above referenced concept, one that is often repeated and similarly used as a “throw away” line when chipping away at the projected and future growth of a company, requires a deeper analysis than I am capable of providing.

However, central to my investment thesis for the many cloud based SaaS stocks that I have invested in, is that the “moat” is a function of the company providing a solution, providing a product, as a front-runner and as a first mover…being first-to-market. Companies that are able to raise and deploy tremendous amounts of capital to build and to secure a customer base that adopts the service or product and then creates a stickiness and/or an ecosystem around their product or service. That is the moat in my opinion.

The cocktail party line about “the competition will catch up to this pretty quickly” is not always the case.

What say you?

Harley

I wish I knew how to correctly use the italics feature!

The cocktail party line about “the competition will catch up to this pretty quickly” is not always the case

If that’s your take, so be it. On the other hand, if you want to take few minutes to see what the competition is doing, you could see even “on-premise, legacy” guys like PANW, is having a direct competing solution similarly along the lines of what ZS has to offer.

A moat is not something that your competitor cannot copy. Ex: Oracle RDBMS has implemented over time so many features within its database. OTOH, AWS has to offer many different databases for various features. The competition cannot quickly copy and thus displace.

If Palo Alto was looking to “catch up” with Zscaler, then why are they say proxies are the wrong solution. No, we need network and routing, as their current appliances run on.

Same reason Cisco created ACI vs joining the SDN bandwagon. Same reason Arista said SD-WAN isn’t really a thing; going that route would cannibalize large/existing install base of legacy solutions.

So for PANW the play is “hardware/firewalls are still needed and great!” while simultaneously ramping up their cloud-based strategy until such a point that cloud-based reaches a majority and tipping point and then they could (in theory) just phase out the legacy business and aggressively push their clients to use their (then more mature) cloud-based solutions instead.

Why did NetApp take so long to debut HCI solution? Same thing.
DellEMC is a case study in throwing crap against a wall and seeing what sticks…buy every company you can, then spin them out, and then buy them back if they turned out to be more strategic than you thought.

It is spin. There is a reason every company seems to tout their solutions as best and their competitors as flawed…it is how they play the game. Some adapt well, and make smart acquisitions, like PANW and CSCO have done…HPE the same. Oh…and they are all pivoting to IoT and “edge” now. DC is less relevant, and it is all about hybrid cloud and edge/IoT based on the marketing these days.

Dreamer

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I guess you are one of the “preferred poster” so no one will jump at you. Otherwise this would be treated as a personal attack and the post removed and you will be admonished. I don’t want that for you.


The Berkshire board called me…we just did a group chat and had a good laugh. They said you do the same crap on their board.

Because it is what you do.

all the best,
Dreamer

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this is quickly becoming unproductive. Rather than feed an unproductive conversation so we can all get the last word in can we move on to other more productive discussions.

best,
e

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The Berkshire board called me…we just did a group chat and had a good laugh

I guess at some level all the cults share same characteristics and attract similar group-think. I am glad you had a good laugh.

Pointing out logical fallacy in a post has nothing to do with the stock.

“Competition may catch up” is not a helpful post. Competition may catch up to Visa and Mastercard. Name one company out there where competition may not catch up to. The useful thing is to analyze actual competitive threats to see if they jeopardize a company and can derail it’s growth. That’s the FUD portion of it. For example today Roku is down because Comcast and Facebook are offering a competing product. It’s not real competition at this time. Until we start seeing hard evidence that a company is starting to lose market share, it’s just panic selling. EVERY company out there has competitive threats. Square went through a bunch of them, each competitor having it’s own shape card reader, some playing on the “Square” shape being overly complicated because their card reader was a triangle. Yet, where are they now, and where is Square?

There is a difference between mentioning true competitive threats and just going around being an antagonist on everything.

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I guess at some level all the cults share same characteristics and attract similar group-think.


So you admit you think this board, and Berkshire (a value play if there ever was one) are cults.
Yet you post heavily to both, with the purpose of???

My guess is you simply gravitated to the boards with the most traffic so that you could find targets to be contrarian with.

I started this thread because ZS had fallen dramatically from their previous highs, now had a P/S lower than similarly growing tech peers (AYX, MDB, ESTC), are in a great secular market, and were about to have 2 catalysts to spark a rebound in stock price: an analyst day and their annual Zenith Live conf.

In other words, I believe the $46 or so low of last week was a potential bottom and based just on acquisition floor alone the price seems great here. It is a time machine taking you back many many months. With the great CRO hire, expanding portfolio, and solid founder/mgmt, I like this one.

I am long ZS. I have no idea what you think of any stocks, just that you like to be combative for the sake of being so.

We should just nuke the whole thread…I could care less if my posts are pulled.
Your posts just seem to provide no value whatsoever. They poke and tear down, yet offer no answers or direction. That is easy to do, and essentially laziness personified at its core.

I am also at 40% cash because I am not sure the carnage is over. Other growth favorites may yet get air out of their balloon, as ROKU is showing today. But I do believe ZS had enough pain inflicted already, as did ESTC thru their agonizingly long stock lockup period, that they are at fairly good prices. Although ZS at $45 is more akin to ESTC in the $70s.

I want to buy stocks at a price that is lower than when I sell them. That is my goal.
Not clear at all what your goal is. I will ignore you from here on out.

Dreamer

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I guess you are one of the “preferred poster” so no one will jump at you. Otherwise this would be treated as a personal attack and the post removed and you will be admonished. I don’t want that for you.

The Berkshire board called me…we just did a group chat and had a good laugh. They said you do the same crap on their board.

Because it is what you do.

Ok Guys, 36 posts in this thread and its going downhill fast. Let’s close this thread now, as its veering into personal attacks and t!t-for-tat stuff and no longer productive.

Thanks for your cooperation.

Matt

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I agree with Ethan, let’s quit back and forth arguing. It’s totally unproductive.
Saul

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Yes Ethan you are correct and provide additional information there.

Wasn’t sure how granular I needed to be in describing AWS Infrastructure for the discussion. Perhaps I was being too general.

An AZ is a combination of one or more data centers in a given region. These datacenters need not to be separated by multiple kilometers physically but by meters with in a physical compound which are completely isolated from each other failure such as power, network in a given AZ. It is a logical grouping of data centers in a given region for service high availability. These AZs in a region are connected with direct Fiber optic links which have capacity of around 25Tbps bandwidth and a latency of 2ms to 1ms.

https://www.linuxnix.com/amazon-aws-regions-vs-availability-…

That is an important fact to be sure. So you have multiple regions, and within regions Availability Zones. Availability Zones are made up of multiple data centers interconnected but physically apart.

In the long run I’m not sure the difference is all that relevant. You increase the physical numbers of DCs but they are still zoned. It doesn’t change the emphasis on the physical distribution of the network architecture. There maybe a handful of data centers in one Zone, but are they across the street or hundreds of miles away from one another? The major concern for having multiple DCs in an AZ is “high availability”. Redundancy in case of a single point of failure. The individual DCs don’t necessarily on their own get the infrastructure closer to the user, the AZ does.

It would have been most accurate to say AWS operates 69 geographic groupings of data centers called AWS Availability Zones.

Sorry to clutter up the board, bowing out of the conversation.

Darth

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“Competition may catch up” is not a helpful post. …
There is a difference between mentioning true competitive threats and just going around being an antagonist on everything.

Context is important. Tinker talked that Architecture is unique differentiator for ZS and on that I mentioned competition will catch up much faster than you imagine.

On your other comment, I think it is not a fair or true reflection. Consider this, on many things I don’t post, perhaps I agree with them?

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I am long ZS. I have no idea what you think of any stocks, just that you like to be combative for the sake of being so

Hope you realize, it is not me but you who picked up this fight with me. I didn’t even respond to your post.

Like I asked, I didn’t make any specific comments about ZS stock rather about a comparison someone made. Why are you getting offended with that and throwing all these personal insults? Not sure what is your problem with me, but I hope you can go back and re-read the posts to see I haven’t started this.

cheers,

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Kingran, your posts 58908 and 58909 are a flagrant attempt to keep a personal argument going on the board, after it has been discontinued. Personal arguments are not permitted on the board and I’ve asked that they be stopped. If you continue, I’ll have your posts deleted. And don’t bother coming back and attacking me either.
Saul

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