How Cybersecurity Firms Palo Alto, Okta Can Capitalize On Blockchain

Palo Alto Networks (PANW), Fortinet (FTNT), Okta (OKTA) and CyberArk Software (CYBR) are among the network security firms that could prosper from utilizing blockchain technology, an analyst said Friday.

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“Blockchain could be opportunistic for network security vendors such as Check Point Software Technologies (CHKP), FireEye (FEYE), Fortinet and Palo Alto Networks, potentially expanding the market with new opportunities,” Shaul Eyal, Oppenheimer analyst, wrote in a note to clients.

Oppenheimer’s Eyal also sees the shared ledger technology playing a role in identity management services, preventing hackers from compromising networks by targeting employees or management with administrative access to computer systems.

“We believe the companies to benefit from the incorporation of blockchain into the identity market include CyberArk, Okta and Sailpoint Technologies (SAIL),” Eyal wrote.

Tracking Transactions

Blockchain is the software technology behind Bitcoin but its uses go beyond cryptocurrencies. As a shared public ledger, it tracks transactions and ensures that the record of those transactions remains transparent and tamper-proof.

Palo Alto, Fortinet and Check Point compete in the network firewall market. Firewalls are located between private networks and the internet, and they block unauthorized traffic.

A growing number of startups have nothing to do with Bitcoin or its cryptocurrencies. Instead, they aim to harness blockchain technology for financial services, e-commerce, food safety, health care and supply-chain management, as well as cybersecurity.

“We believe blockchain and smart contracts could introduce new disruptive innovations that harden the security of IT systems,” said the Oppenheimer report. “Blockchain is an ambitious technology with the potential to ameliorate cybersecurity and automation functionality, which we view as an opportunity for the infrastructure software industry.”

IBD’s Computer-Software Security group is ranked No. 16 out of 197 industry groups. Palo Alto, Fortinet and Sailpoint are among the group’s highest rated companies. Palo Alto is ranked No. 11 in the IBD 50 roster of growth stocks.

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