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Writer's pictureChristina Richmond

Why This Partnership Is a Win for All of IBM, Palo Alto Networks, and Their Customers

By Christina Richmond, Richmond Advisory Group



I've been following the buzz around this IBM-Palo Alto Networks partnership and related QRadar SaaS acquisition for a while. In some discussions, it’s blown out of proportion; in others, it’s downplayed. In my opinion, it’s a significant and positive development for both companies and their customers.


There are a few key reasons why IBM and Palo Alto Networks chose to pursue this deal:


  • IBM can focus on their most strategically important businesses, while Palo Alto Networks gains a valuable asset and customer base. Importantly, IBM retains and continues to service its existing on-prem QRadar customers that are not interested or able to migrate to SaaS.

  • QRadar SaaS customers have the opportunity to benefit from an upgraded security operations product (Cortex XSIAM) and ongoing support for the QRadar SaaS portfolio until they are ready to migrate to the Cortex platform.

  • Migration to the new platform is free for eligible QRadar customers who choose to pay a subscription for Cortex XSIAM, allowing Palo Alto Networks to generate additional revenue.           

  • IBM can reinforce its position as a leading security services provider. With IBM Consulting Cybersecurity Services, transformation services will help customers enhance their security operations centers (SOCs) and overall cybersecurity posture, benefiting from Palo Alto Networks’ advanced technology. IBM’s managed security service (MSSP) capabilities can provide a fully managed solution for customers that need it.


So, with all these positives, why is there so much debate in the media? Why are some customers concerned? Let’s break it down to understand the deeper benefits for all parties involved—Palo Alto Networks, IBM, and the customers.


IBM


At first glance, it might seem like IBM is selling off valuable assets just to raise cash for Research and Development (R&D). But there’s more to it than that. A quick history lesson:

  • When IBM’s CEO Arvind Krishna laid out his $1.2 trillion hybrid cloud growth strategy, many were skeptical. However, the Red Hat acquisition has proven successful, especially within IBM’s hybrid cloud consulting business. Similarly, in cybersecurity, Krishna emphasized that clients need more than just a platform—they need deep industry expertise.

  • IBM has always been a leader in technology innovation and services, particularly in cybersecurity, where it consistently garners top industry accolades.


Let’s not forget IBM’s three key pillars of growth: hybrid cloud, AI, and cybersecurity. Despite selling QRadar SaaS to Palo Alto Networks, IBM isn’t losing access to its customer base and will remain engaged by facilitating upgrades to Cortex XSIAM as part of the free migration services offered to eligible customers. Beyond migration, this allows IBM to continue adding value through critical transformational services, helping clients advance their cybersecurity operations with Cortex XSIAM. Additionally, IBM can broaden engagements to future-proof the enterprise with its AI and quantum technologies and services.


We’ve seen this before: when IBM sold its PC business to Lenovo in 2004, or when it divested its Global Technical Services (GTS) business to Kyndryl, many doubted the move. But each time, IBM demonstrated a clear strategy and emerged stronger. This deal is another such opportunity, even if some naysayers haven’t caught on yet.


Palo Alto Networks               


QRadar has long been a sought-after asset in the security information and event management (SIEM) market. While the relevance of traditional SIEM approaches has been debated in recent years, the current installed base for IBM’s SIEM is still substantial. Though the exact number of customers remains undisclosed, it’s significant. With this deal, Palo Alto Networks instantly gains access to thousands of enterprise SIEM customers that have yet to adopt Cortex XSIAM.


Owning QRadar SaaS further elevates Palo Alto Networks as a leading cybersecurity vendor. Today, Palo Alto Networks is a strong player in security categories like network security, cloud security, endpoint security/XDR, and AI-powered threat detection and response. With Cortex XSIAM and QRadar SaaS, Palo Alto Networks now offers a full-featured SIEM & SOC Automation solution, putting it on par with, if not ahead of, competitors like Cisco (which recently acquired Splunk). Combined with its Unit 42 team’s advanced detection and response capabilities, Palo Alto Networks is well-positioned to compete directly with CrowdStrike as well.


The Customer


For existing QRadar SaaS customers, this partnership offers a unique opportunity to upgrade their security operations by migrating to Palo Alto Networks’ Cortex XSIAM platform. This move could modernize their security infrastructure using one of the industry’s leading platforms. If they are long-standing IBM customers, they’re already familiar with the value QRadar brings and may even have an MSSP (such as IBM, Kyndryl, or others) in place. However, due to various reasons, they may not have previously considered adopting a next-gen SIEM, but now Cortex XSIAM’s cutting-edge capabilities are made more accessible to them as part of the deal.


Additionally, customers loyal to IBM can still rely on IBM Consulting Cybersecurity Services to support the migration process, manage their SOC, and provide the transformational services necessary to elevate their security operations.


The Bottom Line


The IBM and Palo Alto Networks deal has the potential to be a 1 + 1 = 3 situation for all parties. By collaborating, IBM’s cybersecurity consulting services and Palo Alto Networks’ Cortex XSIAM product increases value for customers, while continuing to offer alternatives to customers that aren’t ready to make the move. IBM should aim to maintain broad relationships with all QRadar clients, and it behooves them to offer competitive pricing to retain those customers. Palo Alto Networks, now a proven platform vendor, can benefit from IBM’s expertise in managed services and rely on IBM’s core services capabilities.


As always, the proof will be in the results, but if all goes well, this deal has the potential to benefit all parties—especially the customers.

 

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