SAN FRANCISCO - Cloudflare, Inc. (NYSE: NYSE:NET) has announced the acquisition of BastionZero, a company specializing in Zero Trust infrastructure access, to enhance its Cloudflare One platform, a secure access service edge (SASE) offering. The deal, terms of which were not disclosed, aims to provide improved remote access to critical IT systems for Cloudflare's customers.
The integration of BastionZero with Cloudflare One will allow IT and security teams to implement Zero Trust controls for infrastructure resources such as servers, Kubernetes clusters, and databases. This move is set to expand Cloudflare's VPN replacement solution to cover infrastructure resources, enabling centralized management of hybrid IT environments while maintaining security and productivity for DevOps teams.
The acquisition addresses the vulnerabilities inherent in traditional VPN security setups, which often grant broad and enduring access to sensitive systems. With the shift towards hybrid work models, the need for secure, flexible access to critical systems has become more pronounced.
Matthew Prince, co-founder and CEO of Cloudflare, cited the acquisition as a means to securely extend the flexibility of remote work to teams managing vital organizational systems. Sharon Goldberg, Co-founder and CEO of BastionZero, highlighted the security and operational benefits of integrating their platform with Cloudflare's SASE network.
The acquisition is poised to deliver increased security by eliminating the need for long-lived passwords, increased compliance with just-in-time permissions, increased control through "just-in-time" policy options, and reduced complexity by avoiding legacy security patches.
Cloudflare One, launched in 2020, is one of the fastest-growing SASE and security service edge (SSE (LON:SSE)) platforms, relied upon by companies worldwide to manage access to internal systems and data. The addition of BastionZero is expected to bolster Cloudflare's position in the SASE market, which, according to a Gartner (NYSE:IT) forecast, is anticipated to grow at a compound annual growth rate of 29%, reaching over $25 billion by 2027.
This strategic move aligns with Cloudflare's mission to provide comprehensive, secure, and unified connectivity solutions. The integration of BastionZero's technology into Cloudflare's offerings is based on a press release statement and aims to enhance Cloudflare's ability to deliver secure access to critical infrastructure assets for its customers.
InvestingPro Insights
As Cloudflare, Inc. (NYSE: NET) continues to strengthen its Cloudflare One platform with strategic acquisitions like BastionZero, investors and industry observers are closely monitoring the company's financial health and market position.
According to real-time data from InvestingPro, Cloudflare boasts a robust gross profit margin of 76.78% for the last twelve months as of Q1 2024, underscoring the company's ability to maintain profitability in its core operations despite the costs associated with expansion and acquisitions.
The company's market capitalization stands at $25.55 billion, reflecting investor confidence in its growth strategy and market potential. Still, it is worth noting the high Price / Book multiple of 32.05, which suggests a premium valuation that investors are willing to pay for Cloudflare's assets relative to the book value. This could be attributed to the company's innovative technology and strong market position, especially in the burgeoning SASE market.
InvestingPro Tips highlight several key points for potential investors: Cloudflare is expected to see net income growth this year, and analysts have revised their earnings upwards for the upcoming period, indicating a positive outlook on the company's financial performance.
Moreover, Cloudflare operates with a moderate level of debt, which may provide some financial flexibility as it integrates BastionZero's technology into its offerings. For those looking to delve deeper into Cloudflare's financials and future prospects, InvestingPro offers additional insights, with 16 InvestingPro Tips available on their platform at https://www.investing.com/pro/NET. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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