Palo Alto Networks, Inc. PANW

The business

Palo Alto sells cybersecurity to large enterprises and governments three ways. The oldest is network security: the firewalls that sit at the edge of a company's network, now sold increasingly as a cloud subscription. The second is cloud security, Prisma, which watches the applications companies run on Amazon and Microsoft. The third is security operations, Cortex, the software a security team stares at all day to catch attacks. In January it bought Chronosphere, and it has now closed CyberArk, issuing $18.5 billion in stock to add identity management, the software deciding who is allowed to log into what. Arora's pitch is simple: stop stitching together forty vendors, put it all on us, and it gets cheaper and works better together. That is platformization, and the whole thesis rests on it. The moat is switching costs. Once a security team runs its network, cloud, and alerts through Palo Alto, ripping it out is a year-long project nobody volunteers for.