Dive Brief:

• CrowdStrike executives said they have no interest in entering a pricing war with Palo Alto Networks after executives at the rival company said they would defer billings to lure customers away from competitors.
• Palo Alto Networks, CrowdStrike’s largest competitor, last month shifted its strategy to one it calls “platformization,” a program it coupled with free incentives designed to attract customers away from legacy contracts and consolidate their cybersecurity spend on its various platforms. 
• “Free is never free. Customers understand the difference between product pricing and the total lifetime cost of operating inferior technology,” CrowdStrike Co-Founder and CEO George Kurtz said on Tuesday’s earnings call for the fourth quarter fiscal year 2024, which ended Jan. 31. 

Dive Insight:

Cybersecurity vendors have been calling for their customers to consolidate cybersecurity spending as businesses look to move away from single point solutions. Instead of following Palo Alto Networks’ lead in deferring revenue for at least a year to win new business with free incentives, CrowdStrike is carving out a different strategy.

Platformization is “kind of a made up, fugazi term,” Kurtz said. Bundling, discounting and giving products away for free is not a new scheme in software or security, he said.

CrowdStrike is focused on single-agent architecture on a single platform with a single console, which drives down the operational cost, Kurtz said.

“When we think about what we’ve seen in the past with other competitors, we know free isn’t free and what customers are saying is more consoles, more point products masquerading as platforms create fatigue in their environment,” Kurtz said.

CFO Burt Podbere described CrowdStrike’s strategy as one of consistency, unmoved by shifts in the competitive landscape.

“At the end of the day, we sell on value and we’ve never been a company that’s done deep discounting,” Podbere said.

CrowdStrike banked almost $54 million in net income on $845 million in revenue during the quarter, representing a 33% year-over-year increase in revenue. Subscription revenue reached $796 million, also up 33%, and the company’s annual recurring revenue jumped 34%  to $3.44 billion from the year-ago period.

The company on Tuesday also announced an agreement to acquire Flow Security, a data security posture management provider.