Zscaler’s Acquisition of Red Canary: A Transformative Move in Cybersecurity

In a significant development in the cybersecurity realm, Zscaler, a leader in zero trust security, has announced its intention to acquire Red Canary, a pioneering company in the managed detection and response (MDR) space. The acquisition is set to enhance Zscaler’s capabilities in threat detection and response, providing a substantial upgrade to their offerings in cybersecurity solutions.

As reported, the deal is expected to close in August, although no financial details have been disclosed. Red Canary, which has been operating since 2013, has established itself as a quintessential player in the MDR industry, known for its around-the-clock threat monitoring services. The company has also secured its position as a leader in the sector, consistently ranked by the Forrester Wave report over the past three years.

Red Canary’s Legacy and the Path Ahead

Red Canary’s extensive expertise in threat intelligence reporting has made it a trusted name in cybersecurity. Its acquisition by Zscaler aims to bolster Zscaler’s response capabilities while modernizing Security Operations Centers (SOC) against sophisticated cyber threats. According to Zscaler’s Founder and CEO Jay Chaudhry, this merger is a “natural expansion” of Zscaler’s existing services, geared towards accelerating the vision of an AI-powered SOC of the future.

The synergy between Zscaler and Red Canary is expected to empower clients with a fully integrated zero-trust platform coupled with advanced AI-powered security operations. As Chaudhry emphasizes, “Combining the two companies will deliver to our customers the power of a fully integrated Zero Trust platform and AI-powered security operations.”

A Solid Investment with Growth Potential

This acquisition marks Zscaler’s second major move within 18 months, following its earlier purchase of Avalor, a security data fabric provider, in March 2024. Red Canary has posted an impressive growth trajectory, with its annual recurring revenue (ARR) soaring to over $140 million by the end of January 2024, up from $100 million just six months prior.

In a recent blog post, Red Canary’s Co-Founder and CEO Brian Beyer expressed his enthusiasm about the merger, stating that together with Zscaler, they aim to “revolutionize security operations.” Beyer indicated that the acquisition will facilitate unparalleled access to an astonishing 500 billion daily transactions of data and threat intelligence processed by Zscaler’s Zero Trust Exchange.

Strengthening Partner Ecosystems Post-Acquisition

For Red Canary, the merger will also present significant opportunities to enhance their partnerships. Beyer remarked on the critical role that their partner ecosystem plays in driving their mission forward, highlighting various stakeholders, including Solution Providers, Incident Response partners, and Managed Service Providers (MSPs), who collectively contribute to their success.

Red Canary’s commitment to expanding its services to the three largest public cloud providers—AWS, Microsoft Azure, and Google Cloud—further showcases the company’s intent to remain a competitive force, even amid rapid changes in the cybersecurity landscape.

As the cybersecurity industry continues to evolve, the Zscaler and Red Canary acquisition represents a powerful step forward in enhancing threat detection and response capabilities, which are essential for organizations aiming to safeguard their digital infrastructure.

FAQs About the Zscaler and Red Canary Acquisition

What is the primary aim of Zscaler’s acquisition of Red Canary?

The primary aim is to enhance Zscaler’s capabilities in threat detection and response while modernizing their Security Operations Center.

When is the acquisition expected to be finalized?

The acquisition is anticipated to close in August, although exact dates have not been confirmed.

What notable growth has Red Canary experienced recently?

Red Canary’s annual recurring revenue has significantly increased to over $140 million by the end of January 2024, reflecting robust business growth.

How will this acquisition benefit Red Canary’s current client base?

The merger will allow Red Canary to leverage Zscaler’s vast database of threat intelligence, enabling quicker and more accurate threat detection for its clients.

What future plans do Zscaler and Red Canary have post-merger?

Post-merger, both companies aim to create a fully integrated zero-trust security platform and enhance their products and services to meet evolving cybersecurity needs.