SentinelOne is seeing interest from CrowdStrike customers who weathered the recent IT outage and are looking to diversify their cybersecurity risk.
That’s according to CEO Tomer Weingarten speaking during SentinelOne’s Q2 earnings call where he addressed questions about the outage and its impact on the competitive landscape for advanced cybersecurity services.
“We're talking about the largest outage, systematically impacting millions of people, disrupting thousands of businesses, costing billions of dollars,” he told analysts and investors during the call.
“And this was a global, practically fleet wide outage, totally unprecedented in reach and scale. Secondly, the duration of the outage was also quite unprecedented. Most modern technology services don't really take days to come back online. This has been days to weeks of required manual intervention and reboot of millions of affected devices,” he said.
SentinelOne CEO: 'Never Seen Anything Like This In My Lifetime'
“I've truly never seen anything like this in my lifetime,” Weingarten told analysts and investors in answer to a question during the company’s quarterly earnings call.
Is the outage and its after effects something that will cause competitive migrations? How has the CrowdStrike IT outage impacted the sales pipeline of companies such as SentinelOne? Weingarten provided some perspective on that question.
“At BlackHat a few weeks ago we heard from enterprises that they want to diversify cybersecurity technologies and mitigate the risk of another global outage,” Weingarten said. “There was a lot of excitement and interest in SentinelOne. But companies do not make snap decisions and need to figure out how to make the transition. But this shift is positive for SentinelOne in the broader enterprise security landscape.”
Weingarten added that this has resulted in a significant pipeline pickup for the company. However, most companies do not just rip and replace such a significant technology, and Weingarten warned that sale cycles typically last nine to 12 months.
“Decisions are going to play out over time,” he said. People are looking at us obviously as the number one alternative. People are looking to diversify risk and not really concentrate more and more with one vendor.”
SentinelOne CEO: Windows OS is 'Quite Fragile'
Weingarten also addressed Microsoft’s upcoming Security Summit on September 10, scheduled by the software giant to address the issues raised by the outage. Weingarten noted that Microsoft has tried to move away from broad-based kernel access a few times over the past 10 years and has failed.
“The Windows operating system proves again and again that it is quite fragile, and I think that is the bigger issue at hand,” he said. “When you think about it that way, the level of refactoring that might need to take place with the operating system I think is going to be substantial.”
Weingarten added that the company is taking the opportunity to invest in both its workforce and its partner ecosystem to prepare for the opportunities coming its way.
SentinelOne Q2 Earnings Results and Outlook
SentinelOne reported revenue growth of 33% to $199 million and annualized recurring revenue (ARR) growth of 32% to $806 million for its second fiscal quarter ended July 31. The company reported a GAAP net loss of $69 million, narrowed from a GAAP net loss of $89.5 million for the same quarter last year.
Looking ahead, SentinelOne is providing guidance for Q3 of revenue of $209.5 million and for the full year revenue of $815 million.
