Zscaler, the publicly traded cloud-security company, has quietly purchased a Silicon Valley startup specializing in closed loop security workflow automation.
Zscaler’s purchase of San Jose, Calif.-based ShiftRight, which was launched in 2019 by the founders of Lacework and which was in stealth mode until recently, actually occurred in June and is only now being publicly acknowledged by Zscaler.
Terms of the cash-and-equity deal were partly revealed in a recent SEC filing in which Zscaler said it paid $25.6 million in cash for ShiftRight. But the company said in a statement to CRN that “at this point we are not disclosing the equity portion of the deal.”
The 5,000-employee Zscaler, also based in San Jose, Calif., had been partnering with the 17-employee ShiftRight for six months before the larger firm decided to buy the startup in June, said Moinul Kahn, vice president and GM of data protection at Zscaler.
“Even before we bought the company, we actually started working on the (technological) integration,” Kahn said. “We saw that this technology was solid and we got a huge amount of feedback from customers — they liked it — and then we decided to buy the company.”
He said Zscaler didn’t want to disclose the purchase until the two firms’ technologies were fully integrated.
“At the end of the day, it was a technology acquisition,” he said. “We didn’t buy (ShiftRight) because they had a huge amount of ARR.”
ShiftRight’s revenues were not disclosed. But the company did raise an undisclosed amount of seed funding from individual and institutional investors, Kahn said.
As for ShiftRight’s workflow automation technology, Kahn said customers really like the product.
“It‘s fully closed loop incident management and workflow automation – and that means with a click of a button, I can escalate, I can assign tickets, I can assign different cases to various stakeholders,” said Kahn. “What (customers) are really looking for is workflow automation where they can empower other stakeholders in the organization.”
He said ShiftRight’s technology is so good that Zscaler plans to integrate it with a number of corporate products moving forward.
Sanjay Kalra, CEO of ShiftRight until the sale and now product-management executive at Zscaler, could not be reached for comment by CRN. But Kalra, who helped found San Jose, Calif.-based Lacework in 2015, said in a press release that ShiftRight was a “natural fit” for Zscaler.
“ShiftRight’s technology will strengthen Zscaler’s offerings and transform security into a collaborative solution for internal teams to tackle numerous security challenges, like remediation, deployment, compliance and upgrades,” he said in the statement.
In a press release, Jay Chaudhry, CEO and founder of Zscaler, said the decision to buy ShiftRight was the “logical next step” after it actually worked with its technology.
“We saw the immense benefits of their technology during our pre-existing technology partnership,” he said.
“We will now extend the value of Zscaler’s platform with ShiftRight by simplifying IT and security operations through security workflow automation. The integration of ShiftRight’s technology into Zscaler’s cloud platform will help customers establish clear lines of responsibility and provide real-time visibility for their security posture.”
Kahn, who described Zscaler as a “channel-first company,” said channel players will like the new ShiftRight technology.
“This is a new offering – a very exciting offering.,” he said. “So all our channels should be able to sell it.”