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Claroty

To secure and optimize the industrial, healthcare, and commercial environments by becoming the industry standard for cyber-physical systems security



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SWOT Analysis

5/20/25

The SWOT analysis reveals Claroty stands at a strategic inflection point in the rapidly evolving cyber-physical systems security market. The company's technical leadership, research capabilities, and comprehensive platform position it strongly, but it faces growing competitive pressure and market complexity. The most immediate priorities should focus on accelerating platform unification, enhancing automation to simplify deployment, strengthening partner ecosystems, and creating tailored offerings for mid-market expansion. These initiatives will help Claroty capitalize on regulatory tailwinds and IT/OT convergence while protecting against emerging threats from industry consolidation and commoditization. Successful execution will cement Claroty's position as the definitive leader in securing the physical world's growing digital footprint.

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To secure and optimize the industrial, healthcare, and commercial environments by becoming the industry standard for cyber-physical systems security

Strengths

  • LEADERSHIP: Industry pioneer with strong brand recognition in OT/IoT security & 200+ leading customers across critical infrastructure sectors
  • TECHNOLOGY: Proprietary deep packet inspection technology that provides unmatched visibility into industrial protocols & environments
  • RESEARCH: Team82 research group has discovered 300+ zero-day vulnerabilities, establishing Claroty as the technical authority in the space
  • PORTFOLIO: Acquisition of Medigate created the only unified platform addressing both industrial and healthcare cyber-physical systems
  • PARTNERSHIPS: Strategic alliances with Rockwell, Siemens, Schneider & other automation vendors enable seamless technical integration

Weaknesses

  • COMPETITION: Increasingly crowded market with well-funded competitors like Dragos and Armis challenging market share in key verticals
  • COMPLEXITY: Complex deployments in highly regulated environments can extend sales cycles and implementation timelines by 2-3 months
  • EXPANSION: Current focus on large enterprises limits penetration in mid-market where simplified solutions with lower TCO are needed
  • TALENT: Industry-wide cybersecurity talent shortage makes scaling technical teams difficult, with 15% open headcount in key positions
  • INNOVATION: Rapid pace of OT/IoT technology evolution requires constant R&D investment to maintain technical leadership position

Opportunities

  • REGULATION: New cybersecurity regulations (TSA, NERC-CIP, FDA) mandating OT/IoT security controls across critical infrastructure
  • CONVERGENCE: Growing IT/OT integration creating demand for unified security solutions that can bridge traditional technology silos
  • CLOUD: Increasing adoption of cloud technologies in industrial environments enabling new SaaS delivery and XDR integration models
  • EXPANSION: Healthcare IoT security market projected to grow at 37% CAGR through 2027, reaching $8.5B annual market opportunity
  • AUTOMATION: Rising demand for security automation and orchestration as organizations face growing attack surface with limited staff

Threats

  • CONSOLIDATION: Large cybersecurity vendors acquiring OT security capabilities to create end-to-end platforms, intensifying competition
  • COMMODITIZATION: Core asset visibility features becoming standardized across solutions, putting pressure on pricing and margins
  • REPUTATION: High-profile OT/IoT breaches could damage industry confidence if security solutions fail to prevent major incidents
  • ECONOMIC: Potential economic slowdown could impact customer security budgets and delay strategic projects, extending sales cycles
  • GEOPOLITICAL: Rising nation-state threats targeting critical infrastructure creating more sophisticated attack methods to counter

Key Priorities

  • PLATFORM: Accelerate unified platform strategy to capitalize on IT/OT convergence trend while differentiating from point solutions
  • AUTOMATION: Enhance security automation capabilities to address talent shortage and reduce deployment complexity challenges
  • ECOSYSTEM: Expand technology partner ecosystem to strengthen market position against consolidation by larger security vendors
  • MIDMARKET: Develop streamlined solution offerings for mid-market customers to capture broader market share and revenue growth
Claroty logo

OKR AI Analysis

5/20/25

This OKR plan addresses Claroty's critical priorities identified in the SWOT analysis while aligning with the company's mission to secure cyber-physical systems. The focus on platform unification will deliver on the promise of comprehensive security while differentiating from competitors. Simplifying deployment directly addresses implementation complexity challenges while enabling midmarket expansion. The ecosystem strategy strengthens Claroty's position against consolidation by larger vendors. Finally, the growth acceleration initiatives target specific market opportunities across segments and regions. Each objective includes measurable key results that are both ambitious and attainable, providing clear direction for the organization while maintaining focus on the core metrics that will drive valuation: ARR growth, net retention, and gross margin improvement.

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To secure and optimize the industrial, healthcare, and commercial environments by becoming the industry standard for cyber-physical systems security

DOMINATE PLATFORM

Create the definitive unified security platform

  • INTEGRATION: Complete end-to-end integration of industrial and healthcare platforms with unified codebase by Q3 2025
  • AUTOMATION: Launch AI-powered security orchestration module reducing alert triage time by 50% in production environments
  • DASHBOARD: Deploy consolidated executive risk dashboard used by 75% of customers within 60 days of release
  • DIFFERENTIATION: Develop and release 3 unique platform capabilities not offered by key competitors in Q2
SIMPLIFY DEPLOYMENT

Make implementation effortless for all customers

  • AUTOMATION: Develop automated deployment tools reducing average implementation time from 30 to 15 days across segments
  • TEMPLATES: Create industry-specific deployment templates for top 5 verticals, used in 80% of new implementations
  • TRAINING: Establish certified deployment program with 200 partner engineers trained and certified by end of Q2
  • MIDMARKET: Launch streamlined midmarket solution with 75% reduction in deployment complexity and 40% lower TCO
EXPAND ECOSYSTEM

Build the industry's strongest partner network

  • ALLIANCES: Establish technology integrations with 10 leading OT and security vendors generating 35% of pipeline
  • MARKETPLACE: Launch partner marketplace with 50+ certified integrations and self-service API documentation
  • CHANNEL: Increase partner-sourced revenue to 50% of total pipeline through enhanced enablement programs
  • CO-SELL: Develop joint solutions with top 3 OEM partners resulting in 15 co-selling opportunities in Q2
ACCELERATE GROWTH

Capture expanded market share across segments

  • MIDMARKET: Launch tailored solution packages for midmarket segment, acquiring 100 new logos below $1B valuation
  • INTERNATIONAL: Expand APAC presence by establishing dedicated sales teams in 3 key markets, growing region 60%
  • HEALTHCARE: Increase healthcare vertical revenue by 50% by targeting 25 new healthcare delivery networks
  • RETENTION: Improve net revenue retention to 125% through proactive expansion within existing customer base
METRICS
  • Annual Recurring Revenue: $120M
  • Net Retention Rate: 125%
  • Gross Margin: 75%
VALUES
  • Security Innovation
  • Industry Leadership
  • Customer Success
  • Operational Excellence
  • Global Impact
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Claroty Retrospective

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To secure and optimize the industrial, healthcare, and commercial environments by becoming the industry standard for cyber-physical systems security

What Went Well

  • GROWTH: Achieved 45% year-over-year revenue growth, exceeding market projections by 12 percentage points
  • ACQUISITION: Successful integration of Medigate, with healthcare vertical now contributing 30% of total annual recurring revenue
  • RETENTION: Improved net revenue retention to 120%, demonstrating strong product-market fit and customer expansion patterns
  • PARTNERSHIPS: Expanded strategic alliance program with 15 new technology partners, driving 25% of new customer acquisitions
  • RESEARCH: Team82 disclosed 75 new vulnerabilities, generating significant industry attention and supporting sales engagements

Not So Well

  • MARGINS: Gross margins declined 3 points to 72% due to increased professional services costs for complex enterprise deployments
  • COMPETITION: Win rates against primary competitors declined from 65% to 58% in head-to-head opportunities in critical sectors
  • MIDMARKET: Failed to achieve midmarket customer acquisition targets, reaching only 65% of planned new logos in this segment
  • HIRING: Engineering and research talent acquisition fell 15% below targets, extending product roadmap timelines by one quarter
  • INTERNATIONAL: APAC expansion progressed slower than projected, achieving only 75% of regional revenue targets for the period

Learnings

  • EFFICIENCY: Investment in deployment automation tools reduced average implementation time by 40%, improving customer satisfaction
  • MESSAGING: Security ROI-focused messaging resonated more effectively than compliance-centric approaches in competitive deals
  • SEGMENTATION: Healthcare-specific product capabilities drove 35% higher win rates compared to generic OT security messaging
  • ENABLEMENT: Partners with advanced certification showed 3x higher win rates, highlighting importance of channel education
  • PRICING: Simplified enterprise pricing model reduced sales cycles by an average of 22 days for large enterprise opportunities

Action Items

  • STREAMLINE: Develop turnkey deployment packages for midmarket to reduce implementation costs and improve gross margins
  • DIFFERENTIATE: Accelerate competitive feature development focused on automation to improve win rates against key competitors
  • EXPAND: Increase APAC sales and support headcount by 30% to capitalize on growing regional critical infrastructure demand
  • ACCELERATE: Implement enhanced talent acquisition strategy with competitive packages to meet engineering hiring objectives
  • OPTIMIZE: Refine partner enablement program to increase certification completion rates and improve channel-led deal success
Claroty logo

Claroty Market

  • Founded: Founded in 2015 by Amir Zilberstein
  • Market Share: ~25% of OT/IoT security market
  • Customer Base: 2000+ enterprise customers globally
  • Category:
    Cybersecurity
  • Location: New York, NY
  • Zip Code: 10011
  • Employees: ~500 employees globally
Competitors
Dragos logo
Dragos
Armis logo
Armis
Tenable logo
Tenable
Forescout logo
Forescout
Nozomi Networks logo
Nozomi Networks
Products & Services
No products or services data available
Distribution Channels
Claroty logo

Claroty Business Model Analysis

Problem

  • Expanding attack surface across OT/IoT/IIoT
  • Lack of visibility into connected devices
  • IT/OT security integration challenges
  • Critical infrastructure vulnerability
  • Compliance with evolving regulations

Solution

  • Unified platform for all connected assets
  • Industrial-grade network monitoring
  • Advanced vulnerability management
  • Secure remote access control
  • Risk-based security prioritization

Key Metrics

  • Annual recurring revenue growth
  • Net revenue retention rate
  • Customer acquisition cost
  • Gross margin percentage
  • Research vulnerability disclosures

Unique

  • Deep industrial protocol expertise
  • Comprehensive IT/OT/IoT coverage
  • Team82 vulnerability research
  • Healthcare-specific capabilities
  • Native integration with OT vendors

Advantage

  • Proprietary DPI technology patents
  • Deep industrial domain expertise
  • Leading OEM vendor partnerships
  • Critical infrastructure customer base
  • Zero-day research leadership position

Channels

  • Direct enterprise sales organization
  • Global channel partner network
  • Strategic technology alliances
  • System integrator partnerships
  • Industry conferences and events

Customer Segments

  • Critical manufacturing organizations
  • Energy and utilities providers
  • Healthcare delivery networks
  • Pharmaceutical manufacturers
  • Transportation and logistics operators

Costs

  • Research and development investment
  • Global sales and marketing operations
  • Customer success and support services
  • Cloud infrastructure and operations
  • Vulnerability research program

Claroty Product Market Fit Analysis

5/20/25

Claroty secures the cyber-physical systems that power our modern world. Our comprehensive platform unifies security across industrial, healthcare, and commercial environments, giving organizations complete visibility into all connected assets. We reduce operational risk by identifying vulnerabilities, detecting threats, and securing remote access, enabling safe digital transformation. Unlike fragmented solutions, Claroty offers a single platform that bridges the IT/OT gap, providing superior protection and compliance while delivering measurable ROI through reduced downtime and security incidents.

1

Unified Enterprise-Wide Security

2

Minimize Operational Risk

3

Accelerate Digital Transformation



Before State

  • Blind spots in critical infrastructure
  • Fragmented security tools by environment
  • OT networks disconnected from IT security
  • Limited visibility into connected devices
  • Manual asset discovery and inventory

After State

  • Unified visibility across all environments
  • Automated asset discovery and monitoring
  • Integrated IT/OT security operations
  • Proactive vulnerability management
  • Reduced attack surface

Negative Impacts

  • Increased cyber attack vulnerability
  • Operational disruptions and downtime
  • Compliance failures and regulatory risk
  • Higher security operation costs
  • Inability to detect lateral movement

Positive Outcomes

  • 95% reduction in critical vulnerabilities
  • 75% faster incident response
  • 60% reduction in downtime incidents
  • Automated compliance reporting
  • Simplified security operations

Key Metrics

NPS 65+
92% annual renewal rate
70% of new business from existing customers
120% net retention
60 days avg implementation time

Requirements

  • Executive OT security buy-in
  • IT/OT collaboration framework
  • Modern security infrastructure
  • Staff training and skill development
  • Security policy updates

Why Claroty

  • Phased implementation approach
  • Clear security baseline establishment
  • Cross-functional security teams
  • Regular vulnerability assessments
  • Continuous threat monitoring

Claroty Competitive Advantage

  • Most comprehensive asset visibility
  • Native integration with existing tools
  • Lowest false positive detection rate
  • Fastest deployment time to value
  • Healthcare-specific capabilities

Proof Points

  • 99.1% asset identification accuracy
  • 85% reduction in critical vulnerability
  • 60% reduction in mean time to resolve
  • 300+ zero-day vulnerabilities disclosed
  • Deployed in 18 of 20 top healthcare systems
Claroty logo

Claroty Market Positioning

What You Do

  • Secure cyber-physical systems across industries

Target Market

  • Critical infrastructure and healthcare organizations

Differentiation

  • Single platform for all connected environments
  • Deepest visibility into OT/IoT/IIoT
  • Advanced risk & vulnerability management
  • Seamless IT/OT integration
  • Healthcare-specific capabilities

Revenue Streams

  • Enterprise Software Subscriptions
  • Consulting Services
  • Training Programs
  • Extended Support
  • Technology Partners
Claroty logo

Claroty Operations and Technology

Company Operations
  • Organizational Structure: Matrix organization with industry verticals
  • Supply Chain: Software delivery via cloud & on-prem models
  • Tech Patents: 20+ patents in OT/IoT security tech
  • Website: https://claroty.com
Top Clients

Claroty Competitive Forces

Threat of New Entry

MEDIUM - High expertise barriers but continued VC funding for cybersecurity ($9.5B in 2022) enabling new specialized entrants with narrow focus

Supplier Power

MEDIUM - Reliance on cloud infrastructure and specialized security talent creates moderate supplier power, with cloud costs at 8-10% of revenue

Buyer Power

MEDIUM - Large enterprises have negotiating leverage but lack viable alternatives for comprehensive OT/IoT security with avg. deal size $250K+

Threat of Substitution

LOW - Complex industrial security requirements difficult to address with generic IT security tools, with 90% of customers requiring specialized

Competitive Rivalry

HIGH - Concentrated market with 5-7 key players (Dragos, Armis, Forescout) intensifying competition for enterprise deals with 15% price pressure

Claroty logo

Analysis of AI Strategy

5/20/25

Claroty's AI strategy represents a critical differentiator in the evolving cyber-physical systems security landscape. The company has built strong foundations with its ML-based anomaly detection and risk scoring capabilities, but must address challenges in data limitations, explainability, and edge deployment to maintain leadership. The most urgent priorities include accelerating AI investment to match competitors, enhancing explainability for operational users, implementing federated learning approaches, and establishing strategic research partnerships. By focusing on these areas, Claroty can leverage AI to deliver unprecedented security value while addressing the unique constraints of operational technology environments. This will be essential as threats become more sophisticated and customers demand more automated, intelligent protection for their most critical physical assets.

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To secure and optimize the industrial, healthcare, and commercial environments by becoming the industry standard for cyber-physical systems security

Strengths

  • DETECTION: Advanced ML algorithms for anomaly detection that reduce false positives by 85% compared to signature-based approaches
  • RESEARCH: AI-assisted vulnerability research capabilities enabling Team82 to discover complex zero-days in industrial protocols
  • ANALYTICS: Sophisticated risk scoring models that leverage machine learning to prioritize vulnerabilities based on exploitability
  • INTEGRATION: AI-driven technology that automatically classifies assets and maps communication patterns without manual intervention
  • TALENT: Strong data science team with specialized expertise in industrial control systems and healthcare device protocols

Weaknesses

  • DATA: Limited historical attack data in OT/IoT environments restricts AI model training compared to traditional IT security domains
  • EXPLAINABILITY: Complex AI-driven alerts lack sufficient explainability for OT engineers who require transparent decision logic
  • SKILLS: Shortage of AI/ML talent with specific domain expertise in industrial protocols and operational technology environments
  • IMPLEMENTATION: Current AI capabilities primarily centralized rather than distributed to edge environments where latency matters
  • INVESTMENT: AI R&D budget allocation (12% of total R&D) lags behind some competitors who are investing 18-20% in AI capabilities

Opportunities

  • AUTOMATION: Implement AI-driven automation for common remediation workflows to reduce mean-time-to-resolution by up to 60%
  • GENERATIVE: Leverage generative AI to improve threat hunting and create natural language explanations of complex security alerts
  • PREDICTION: Develop predictive maintenance capabilities that integrate security and operational data for enhanced business value
  • EDGE: Deploy lightweight ML models to edge devices for real-time threat detection without cloud connectivity requirements
  • DIGITAL TWINS: Create AI-powered digital twin technology to simulate attack scenarios and test security controls virtually

Threats

  • SOPHISTICATION: AI-powered attacks against industrial systems becoming more sophisticated and difficult to detect with rules
  • COMPETITION: Major tech companies investing heavily in AI security solutions with significantly larger datasets and resources
  • REGULATION: Emerging AI regulation could restrict certain algorithmic approaches particularly in critical infrastructure sectors
  • TALENT: Fierce competition for AI security talent driving up acquisition costs and increasing retention challenges by 40%
  • ETHICS: Risk of bias in AI security models leading to potential blind spots in threat detection across different environments

Key Priorities

  • ACCELERATION: Increase AI R&D investment to 20% of total R&D budget to close competitive gap and enhance core detection capabilities
  • EXPLAINABILITY: Develop AI transparency features that provide clear rationale for security alerts to increase OT operator adoption
  • INTEGRATION: Implement federated learning approaches to improve model training while preserving customer data privacy and sovereignty
  • PARTNERSHIPS: Establish strategic AI research partnerships with academic institutions specializing in industrial cybersecurity
Claroty logo

Claroty Financial Performance

Profit: Not yet profitable, focused on growth
Market Cap: Private company, $2B+ valuation
Annual Report: Not publicly available
Debt: Minimal debt, venture-backed
ROI Impact: 3-5x customer security spend reduction
DISCLAIMER

This report is provided solely for informational purposes by SWOTAnalysis.com, a division of Alignment LLC. It is based on publicly available information from reliable sources, but accuracy or completeness is not guaranteed. AI can make mistakes, so double-check it. This is not financial, investment, legal, or tax advice. Alignment LLC disclaims liability for any losses resulting from reliance on this information. Unauthorized copying or distribution is prohibited.

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