The Zhitong Finance App learned that cybersecurity company Palo Alto Networks (PANW.US) has been actively seeking large-scale mergers and acquisitions in recent years. According to the latest news, Nikesh Arora, the company's CEO, tried to acquire the cloud monitoring and security platform Datadog (DDOG.US) and the identity authentication company Okta (OKTA.US) respectively, but in the end, the relevant negotiations failed to reach a deal. Meanwhile, Palo Alto Networks is currently still evaluating new acquisition targets and sees areas such as AI security as potential expansion directions.
Arora held a series of talks with Okta CEO Todd McKinnon from the end of 2024 to the beginning of 2025 to discuss a potential acquisition deal, according to media reports on Wednesday, citing people familiar with the matter. However, in the end, the two sides were unable to reach an agreement on the price issue, and the relevant negotiations were later terminated.
If the deal progresses at the time, it would mean Palo Alto Networks further entry into the identity and access management market. Okta mainly provides authentication and access management solutions to enterprises, which complement Palo Alto Networks' existing cybersecurity business.
In addition to Okta, Palo Alto Networks has also listed Datadog as a potential acquisition target. Arora met with Datadog CEO Olivier Pomel last spring to discuss potential deal possibilities, the report said.
However, Pomel had no interest in selling the company, so discussions between the two parties did not develop further, and Palo Alto Networks ultimately did not submit an official acquisition offer to Datadog.
Datadog shares rose 3% on Wednesday after the news was announced. A Palo Alto Networks spokesperson said the company would not comment on “rumors or speculations.” Datadog and Okta did not comment.
Although previous attempts to acquire Datadog and Okta have not yielded results, Palo Alto Networks' merger and acquisition expansion strategy has not stopped. Currently, Arora is looking for products and companies that complement the Chronosphere business.
Palo Alto Networks previously further expanded its cloud-native observability business through the acquisition of Chronosphere. The so-called observability mainly helps enterprises monitor the operating status of complex software, cloud computing, and IT infrastructure in real time, and quickly identify performance and security issues.
The report pointed out that currently companies that may be in line with this strategic direction include data infrastructure startup Cribl and database company ClickHouse. Among them, Cribl's valuation is about 3.5 billion US dollars; ClickHouse reached a valuation of about 15 billion US dollars after completing a round of financing in January this year.
However, there is currently no indication that Palo Alto Networks has officially proposed a takeover offer to the above companies, which are more of a potential transaction direction Arora is watching.
In addition to expanding its product portfolio around Chronosphere, Palo Alto Networks is also evaluating potential mergers and acquisitions in the field of AI security.
As enterprises rapidly deploy generative AI, AI agents, and related infrastructure, issues such as data leakage, model security, authentication, and access rights brought about by AI applications are becoming a new growth market for the cybersecurity industry.
For Palo Alto Networks, the coverage of its security platform can be further expanded by complementing related technology through mergers and acquisitions.
Overall, Palo Alto Networks has been actively seeking large-scale mergers and acquisitions in recent years to accelerate the transformation from a traditional cybersecurity vendor to a comprehensive security platform covering cloud security, identity management, observability, and AI security. Although previous attempts to acquire Datadog and Okta were unsuccessful, the company is still looking for new trading opportunities, and complementary technology with Chronosphere and AI security are becoming its next focus.