Dive Brief:
- Palo Alto Networks is fielding requests from organizations reevaluating their security vendors following last month’s global IT outage linked to a faulty CrowdStrike software upgrade. Businesses are considering changing security vendors, CEO Nikesh Arora told analysts during a Q4 fiscal 2024 earnings call.
- “The recent outage has caused a number of customers to reevaluate their options,” Arora said. “They have initiated conversations with us around XDR and XSIAM.”
Dive Insight:
A mismatched software update in CrowdStrike’s Falcon sensor caused a global IT outage on July 19 impacting at least 8.5 million Microsoft Windows devices. The catastrophic update disrupted critical services across multiple industries. Thousands of airline flights were canceled, major hospitals were forced to cancel surgeries and divert emergency room patients, and 911 emergency services were suspended in several locations across the U.S.
CrowdStrike’s CEO quickly apologized for the outage and the company issued a report pledging significant changes to prevent such incidents in the future. Arora praised the handling of the situation by CrowdStrike.
Customers have been inquiring about Palo Alto Networks’ software upgrade processes. Arora mentioned their phased approach to deployments and ongoing deals with customers even during the recovery from the IT outage in July.
The incident prompted some customers to explore the XDR market, giving Palo Alto Networks consideration in that space. Arora’s statements align with prior reports of customer backlash against CrowdStrike and the potential impact on new sales and renewals.
While some analysts observe strong customer support for CrowdStrike, others note conversations with clients who are looking to justify sticking with the vendor or making a business case for adding them as a new customer.
