SentinelOne CEO on Wiz M&A: 'Pure Speculation on Their Part'Tomer Weingarten Nixes Wiz Reselling Agreement After Not Seeing 'Any Contribution'
SentinelOne CEO Tomer Weingarten fired back at endpoint security rivals CrowdStrike and Microsoft as well as rumored M&A suitor Wiz for publicly fanning acquisition flames.
The Silicon Valley-based endpoint security firm called the Wiz acquisition rumors "a head-scratcher," "far from fact" and "pure speculation on their part" days after the cloud security firm had confirmed its interest in a deal. Reuters on Aug. 21 reported that SentinelOne had hired Qatalyst Partners to advise on talks with potential acquirers, and Bloomberg said Friday that Wiz had approached bankers to discuss a deal (see: Why a Wiz-SentinelOne Deal Makes Sense, and Why It Might Not).
"Our focus is on building an independent company for the long term," Weingarten told investors Thursday. "We are laser-focused on delivering the best innovation we can, the best protection we can for our customers and maximizing our business potential. We believe the best way to do that is as a public, independent, transparent company."
Weingarten called reports that SentinelOne terminated its partnership with Wiz "misconstrued," and said only the reselling agreement between the two companies had been canceled. SentinelOne's technical integration with Wiz still exists, Weingarten said, and the companies still work together in the field. Wiz declined to comment, while Microsoft didn’t respond to an Information Security Media Group request for comment.
"Wiz is a nice new startup," Weingarten said. "We like working with them. But in terms of the reselling agreement, we didn't see any contribution from that. We didn't feel like that's something that was being fulfilled on their end, so we decided to terminate that."
Weingarten said Wiz's security technology is "highly limited to the public cloud," while SentinelOne's server and workload protection capabilities allow the company to support customers regardless of if they're on premises, in a private cloud or using a public cloud. Some of Wiz's Fortune 100 customers also work with SentinelOne, and Weingarten said he wants those organizations to have a great experience.
"Wiz has a nice little set of customers," Weingarten said. "When a customer wants to use Wiz, by all means, we will be there to support it. When a customer wants something more holistic, we will serve our own."
Weingarten Goes After CrowdStrike's Platform, Microsoft's Pricing
Weingarten also took exception to CrowdStrike CEO George Kurtz telling investors Wednesday, "Point product, single-feature cloud security companies are learning the hard way that platforms built by design win at scale." The CEO objected to Kurtz calling SentinelOne a "point product" since the company generates more than 30% of its sales from outside the endpoint, with cloud ARR growing north of 100% (see: CrowdStrike CEO: Point Product Vendors Are Being Left Behind).
"Our focus is on building an independent company for the long-term."
– Tomer Weingarten, CEO, SentinelOne
Despite Kurtz's claims, Weingarten said SentinelOne actually has "the broadest platform out there," while CrowdStrike has two distinctly different platforms with two consoles, two programming languages and two product lines. Weingarten also called Kurtz's representation that CrowdStrike was the only "vendor of consequence" at Black Hat to have a live demo of generative AI in action "a blatant lie."
"It's unbelievable that you see them calling out or implying that we are a point product company when it's plain to see we're the broadest platform out there," Weingarten said. "That's an overt misrepresentation that confuses customers. It's just shocking to see that."
A CrowdStrike spokesperson fired back in an emailed statement to ISMG. "It must be a stressful and emotional time for Tomer," the spokesperson wrote. "At CrowdStrike, we remain totally focused on customer outcomes. From day one, the Falcon platform brought AI to cybersecurity. We'll let our customers and results do the talking."
As for Microsoft, Weingarten said organizations are starting to realize that they can get better security at a lower price elsewhere once the workload, logging and service pricing are all factored in. Stand-alone security providers offer a "completely different level of support" than Microsoft, Weingarten said, plus Microsoft's technology is tough to use since it's actually a "bundle of solutions" rather than a platform.
"We definitely see more customers starting to understand that the lack of price transparency is causing them to overpay for what they would get from another vendor at a lower price point," Weingarten said. "There is a slight dynamic change there. I wouldn't call any of that right now transformative. I think it's just starting to trickle down."
Weingarten also said Microsoft's lackluster security practices paved the way for Chinese espionage over the summer involving hundreds of thousands of U.S. government emails. Critical logging information needed to detect the technically sophisticated Chinese espionage campaign had been available only to purchasers of Microsoft's top-tier cloud service (see: Microsoft Expands Logging Access After Chinese Hack Blowback).
"Microsoft solutions are known to be riddled with vulnerabilities, which are accompanied by cybersecurity that has been repeatedly breached," Weingarten said. "Lawmakers and security experts are questioning the significant shortcomings of Microsoft cybersecurity and are asking for an investigation into the company's security practices."
Revenue Soars, Losses Lessen
|Quarter Ended July 31, 2023
|Quarter Ended July 31, 2022
|Loss Per Share
|Non-GAAP Net Loss
|Non-GAAP Loss Per Share
SentinelOne's revenue of $149.4 million in the quarter ended July 31 beat Seeking Alpha's sales estimate of $141 million. And the company's non-GAAP loss of $0.08 per share beat Seeking Alpha's net loss estimate of $0.14 per share.
The company's stock climbed $0.37 - 3.22% - to $17 per share in after-hours trading Thursday. That's the highest SentinelOne's stock has traded since June 1. For the quarter ending Oct. 31, SentinelOne expects revenue of $156 million.