Besides blogging about my take on our new product releases, interesting partnerships, and discussing trends in the security market, every six months or so I like to use this blog as a forum to give a business update to our customers and partners on Centrify itself. We find that many of our customers and partners are vested in us as a key technology provider and like to hear how we are doing. My last Centrify business update was just a few months ago, where I discussed our record Fiscal Year results (our FY ends in June). But business is really rapidly accelerating for Centrify, so I wanted to break my bi-annual update and give a quick quarterly business update.
Like with other technology vendors, usually the September quarter is a slower quarter sales-wise because of summer vacations. In years past technology vendors — especially those in the cybersecurity market — could often count on the Federal government’s fiscal year end to help bridge the gap sales-wise, but recently Federal spending vis a vis technology has been muted given sequestrations and budget cuts. That’s why you often hear the September quarter being described as a “seasonally weak” quarter.
So it was quite interesting that in the September quarter just ending a few days ago that Centrify actually had our best ever quarter as a company (and note there were no out of the ordinary “whale” deals or transactions that tipped the scale). In fact, we beat our sales plans by 23% and grew more than 40% year over year when comparing September quarters. And this was right after we had our best ever quarter in June, so the bar was high to begin with.
When our employees heard that we blew out our sales numbers and had set a record in a historically weak quarter, they asked me why is it that Centrify’s momentum appears to be accelerating. Clearly I believe we have great products, team, partners, etc., that enable us to blow out our numbers, but at the end of the day the most important thing is that we find ourselves in a great market with a must have solution that is heavily differentiated. Or as some VCs like to say, we have a strong “product/market fit.”
As I talked about in my last blog on the fragmentation of the identity market, clearly the identity market is a fast growing market, but the overall market is really growing only 9%, with the cloud identity sub-segment (which is fastest growing segment) growing 25%. So how we are able grow faster at scale than the fastest growing segment within identity?
To me it goes back to what I heard recently at a CEO summit hosted by one of our investors (Accel) where I heard the CEO of VMware speak. He said that if you talk to CIOs, the top of mind items for CIOs are Security, Cloud, Mobile and Big Data. And as I reflected on this I thought that Centrify truly has or can have a good story in all four areas. So to me Centrify is taking advantages of multiple “rising tides” which is allowing us to further accelerate vis a vis other identity vendors who may take advantage of just cloud or security.
Clearly we address the first item, Security. And the good news for us within security is the fact that identity is increasingly becoming more important. Why is that? Well the reality is that the world of IT is becoming more “de-perimeterized” because of cloud and mobile. One result of this is that IT organizations no longer own the user’s end point — because of Bring Your Own Device (“BYOD”) — and no longer own the back-end resource — because of Bring Your Own Application (“BYOA”) and growing deployments of both Software- and Infrastructure- as-a-Service.
This in turn means that securing users’ identities is now dramatically rising in importance from a security perspective. This is because traditional IT security products such as anti-virus and firewalls are frankly no longer as applicable in a world in which users are no longer inside the firewall and are now using their iPad at Starbucks to access Salesforce, Concur, Google Apps, etc. Therefore, making sure the user’s identity is secure (i.e. users’ passwords are not hacked) and that users can get secure access anywhere and on any device are now top priorities vis a vis security.
Clearly we also address the second item, Cloud. We support more than 2500+ SaaS apps, delivering end users from password hell via single sign-on while giving IT the control and visibility (e.g. provisioning, policy, reporting, etc.) over what is increasingly being referred to as “Shadow IT.” And our offering itself is cloud-based, being significantly more differentiated than pureplay cloud identity vendors, which makes us more nimble and faster/easier to deploy vis a vis not only legacy and cumbersome on-premises identity management suites, but also point solutions from cloud identity vendors.
We also address the third item, Mobile. While we have supported Mobile for many years, we announced expanding our Samsung OEM relationship a few weeks ago. We also uniquely integrate Enterprise Mobile Management and Mac Management with our robust Identity-as-a-Service solution. We call this the Centrify User Suite and in fact it is a single solution for both Cloud and Mobile, i.e. we do both in one solution.
Aha, you say, I get that you address Security, Cloud and Mobile, but what about the fourth key item for CIOs, Big Data? Do you guys really have a story for that? We are going to formally announce solutions and our strategy with respect to Big Data in the coming months (don’t want to jump that gun in this blog!). But if you look at what this Big Data stuff is running on, what you find is that Big Data infrastructure such as Hadoop is mainly running on Linux systems. In fact, if you look at all the hot new technologies in the data center — Hadoop, MongoDB, Dockers, OpenStack, etc. — it all mainly runs on Linux. And we have customers and partners coming to us who are telling us they need better Kerberos support than what these apps natively provide, better Active Directory integration, and better privilege management to control who can access this critical and sensitive Big Data, etc.
So we are in fact seeing accelerating demand for our Centrify Server Suite that addresses identity management for Linux-based systems and apps, as these new infrastructure solutions (Hadoop, MongoDB, etc.) represent the next generation of apps running on Linux. These solutions also need significantly more servers than standard databases and apps, and are causing further “scale out” of Linux systems. And frankly these solutions and the underlying servers really need what we offer with the Centrify Server Suite.
Hence I believe our growth is not tied just to “security” or just “cloud,” or “cloud + security,” but to other major waves (mobile, Big Data, etc.) within the enterprise. In our case these waves and trends are nicely converging for us, which explains a lot of our accelerating growth. And we plan on keeping our momentum growing because of this.