Resellers cheer Palo Alto Networks IPO

Successful stock market debut proves security market is the place to be, according to partners

Palo Alto Networks' barnstorming initial public offering (IPO) has been hailed by resellers as a sign of the IT security market's enduring strength.

After debuting on the New York Stock Exchange on Friday at $42, the next-generation firewall (NGF) vendor's share price immediately spiked by 31 per cent, ending the day 27 per cent up. It had initially planned to raise $229.4m by offering its shares at between $34 to $37.

This comes on the heels of successful security vendor IPOs from Infoblox and Proofpoint earlier in the year.

Gartner predicts that, by 2014, 60 per cent of new firewall purchases will be NGFs. Palo Alto, which was founded in 2005 by a group of former NetScreen executives, saw its revenues double to $118.6m in its last financial year.

Jonathan Lassman, managing director of Palo Alto partner NTS, said the IPO would help raise Palo Alto's profile among his customers.

"At a time when no one wants to IPO, this proves the security market is the place to be," he said. "If you come out with innovative technology, the market will back you."

Palo Alto draws just 26 per cent of sales from EMEA but Lassman urged the vendor not to change its strategy. "They are doing everything right, they just need to keep innovating," he said.

Rick Gray, managing director at Palo Alto partner Synetix Solutions, said: "Palo Alto is a fantastic product, which is one of the reasons we took it on at such an early stage. Looking at [the background of its executives] it was a given it would be successful."