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Zscaler Product

To securely enable digital transformation by creating a world where the exchange of information is always secure and seamless

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To securely enable digital transformation by creating a world where the exchange of information is always secure and seamless

Strengths

  • ARCHITECTURE: Cloud-native zero trust platform with no hardware
  • MARKET: Leader in Gartner Magic Quadrant for SSE for 12 years
  • CUSTOMERS: 40% of Fortune 500 with 95% retention rate
  • INNOVATION: AI-powered threat detection with 300B signals daily
  • GROWTH: 35% YoY revenue growth with expanding gross margins

Weaknesses

  • ENTERPRISE: Heavy reliance on large enterprise segment (65%)
  • COMPETITION: Increasing competition from legacy security vendors
  • PIPELINE: Extended sales cycles (240+ days) for large deals
  • INTEGRATION: Complex implementation for customers with legacy
  • MARGINS: High S&M costs at 48% of revenue impacts profitability

Opportunities

  • EXPANSION: $72B TAM with only 10% current penetration
  • PLATFORM: Cross-sell ZDX, ZCP and ZDT to existing customers
  • REGULATIONS: New compliance mandates driving zero trust adoption
  • PARTNERS: Expand channel partnerships to reach mid-market
  • GLOBAL: International expansion beyond current 55% US revenue

Threats

  • CONSOLIDATION: Security vendor consolidation pressuring margins
  • ALTERNATIVES: SASE offerings from Palo Alto and Cisco gaining
  • BUDGETS: IT security spending constraints in uncertain economy
  • TALENT: Fierce competition for cybersecurity talent
  • REPUTATION: Any security breach could severely damage brand

Key Priorities

  • PLATFORM: Accelerate ZPA/ZIA/ZDX bundle adoption
  • MIDMARKET: Expand downmarket with simplified offerings
  • PARTNERS: Scale channel program to improve sales efficiency
  • AI: Enhance product differentiation with AI capabilities
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To securely enable digital transformation by creating a world where the exchange of information is always secure and seamless

PLATFORM ADOPTION

Accelerate ZPA/ZIA/ZDX bundle usage across segments

  • ATTACH: Increase ZPA+ZIA+ZDX bundle adoption to 65% of new customers by Q3 2025
  • UPSELL: Convert 25% of single-product customers to multi-product bundles this quarter
  • ENABLEMENT: Train 100% of sales teams on bundle value proposition and competitive positioning
  • PACKAGES: Launch 3 new industry-specific solution packages with bundle pricing incentives
MIDMARKET EXPANSION

Capture untapped growth in organizations under 5000 users

  • SIMPLIFY: Launch midmarket-specific bundle with 50% faster implementation by end of quarter
  • GROWTH: Increase midmarket customer count by 20% compared to previous quarter
  • AUTOMATION: Reduce midmarket implementation time from 45 to 28 days through self-service tools
  • MARKETING: Generate 500 qualified midmarket leads through targeted digital campaigns
PARTNER ECOSYSTEM

Scale channel program to improve sales velocity and reach

  • RECRUITMENT: Onboard 125 new channel partners focused on midmarket segment this quarter
  • ENABLEMENT: Certify 80% of partners on platform bundles through new training program
  • CONTRIBUTION: Increase partner-sourced pipeline by 30% compared to previous quarter
  • EFFICIENCY: Reduce partner deal registration to implementation cycle time by 25%
AI ACCELERATION

Differentiate through AI-powered security automation

  • INNOVATION: Launch AI-powered threat detection with 40% improved accuracy by quarter end
  • ADOPTION: Achieve 30% customer adoption of AI-powered security automation features
  • OUTCOMES: Demonstrate 50% reduction in false positives for AI-enabled customers
  • TALENT: Hire 15 AI/ML specialists to accelerate security AI innovation roadmap
METRICS
  • ZPA/ZIA Bundle Adoption Rate: 65%
  • Net Revenue Retention Rate: 125%
  • New Logo Growth Rate (Midmarket): 25%
VALUES
  • Customer Obsession
  • Innovation
  • Teamwork
  • Operational Excellence
  • Integrity
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Align the learnings

Zscaler Product Retrospective

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To securely enable digital transformation by creating a world where the exchange of information is always secure and seamless

What Went Well

  • REVENUE: Q2 revenue of $535M exceeded guidance, growing 35% YoY
  • ENTERPRISE: Closed 314 deals over $1M ARR, up 28% YoY
  • RETENTION: Net retention rate steady at 120% for 8th consecutive quarter
  • PLATFORM: ZIA+ZPA+ZDX bundle adoption increased to 55% of new customers
  • PROFITABILITY: Non-GAAP operating margin reached 16%, up from 13% YoY

Not So Well

  • PIPELINE: Extended sales cycles of 240+ days impacting growth predictability
  • MIDMARKET: Adoption in organizations below 2000 employees below target rate
  • INTERNATIONAL: EMEA growth at 27% trailing Americas growth of 38% YoY
  • COMPETITION: Win rates declined 3% vs legacy vendors bundling offerings
  • MARGINS: Gross margins squeezed by 1.5% due to infrastructure investments

Learnings

  • PACKAGING: Enterprise customers prefer platform bundles over point products
  • CHANNEL: Partner-sourced deals close 35% faster than direct sales motion
  • VERTICALIZATION: Industry-specific solutions improve win rates by 25%
  • AI: Early AI adopters see 43% reduction in security incidents vs. non-adopters
  • IMPLEMENTATION: Professional services engagement shortens time-to-value by 40%

Action Items

  • PARTNERS: Expand channel program with 500 new partners by end of 2025
  • SIMPLIFICATION: Create midmarket-focused bundles with streamlined onboarding
  • VERTICALIZATION: Develop 5 new industry-specific solution packages
  • ACCELERATION: Reduce implementation time by 30% through automation
  • EFFICIENCY: Optimize sales coverage model to reduce CAC by 15%
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To securely enable digital transformation by creating a world where the exchange of information is always secure and seamless

Strengths

  • DATA: 300B+ security signals processed daily for AI training
  • RESEARCH: Dedicated AI research team with 50+ data scientists
  • INNOVATION: Early mover in AI-powered threat detection
  • INTEGRATION: AI capabilities embedded across all products
  • INFRASTRUCTURE: Cloud-native architecture ideal for AI scaling

Weaknesses

  • TALENT: Shortage of AI/ML specialized security experts
  • ADOPTION: Customer hesitancy to adopt AI security features
  • CUSTOMIZATION: Limited AI model customization for verticals
  • EXPLAINABILITY: AI detection lacks transparency for customers
  • COMPETITION: Major tech giants investing heavily in AI security

Opportunities

  • AUTOMATION: Reduce customer SOC workload by 70% with AI
  • PREDICTION: Proactive threat prevention vs. reactive detection
  • PERSONALIZATION: Contextual security policies based on behavior
  • INTEGRATION: AI-powered cross-platform security orchestration
  • DIFFERENTIATION: AI as key differentiator from legacy vendors

Threats

  • COMPETITION: Microsoft/Google investing billions in AI security
  • STANDARDS: Lack of industry standards for AI security tools
  • REGULATION: Emerging AI regulations may restrict capabilities
  • TALENT: Intense competition for limited AI security talent
  • BIAS: AI model biases could lead to false positives/negatives

Key Priorities

  • AUTOMATE: Develop AI SOC automation to reduce customer workload
  • DIFFERENTIATE: Enhance AI threat detection capabilities
  • TALENT: Establish AI security talent acquisition program
  • EDUCATION: Create customer AI adoption enablement program