ZSCALER INC

Pricing Strategies for Cybersecurity Products and Services

• Subscription Models

  • Zscaler's Approach: Zscaler has been transitioning customers to a subscription model, particularly through its Zero Trust models like ZIA (Zscaler Internet Access) and ZPA (Zscaler Private Access). This approach provides scalability and flexibility for a wide range of users.
  • ACV Deals: Significant deals highlight the adoption of subscriptions, such as a global aerospace company purchasing ZIA for 100,000 users in a seven-figure annual contract value (ACV) deal. This reflects a strategic shift toward cloud-first architecture among enterprises.

• Value-Based Pricing

  • Customer-Centric Innovations: The introduction of unique offerings (like combining ZPA with a cloud browser) indicates a trend toward value-based pricing focused on operational simplicity and security enhancements. This model directly addresses customer needs by providing cost reductions and better security through integrated solutions.
  • Upselling Opportunities: The example of existing customers, like a Fortune 500 insurance company that expanded their ZIA subscription significantly, suggests a value-based pricing strategy allowing for upselling as customers discover additional value through enhanced services.

• Industry-Specific Needs

  • Customization for Diverse Sectors: Zscaler caters to diverse industry-specific needs, evident in partnerships with large enterprises across sectors such as pharmaceuticals and insurance. For instance, a pharma company adopted Zscaler’s data protection solution for 23,000 users, reflecting tailored solutions to unique operational challenges.
  • Evolving Security Landscapes: The cybersecurity landscape is rapidly evolving, with increasing adoption of AI-driven solutions aimed at protecting customer data. The integration of AI in Zscaler's offerings, designed to address specific threats and operational efficiencies, showcases how companies are adapting their pricing strategies to align with the urgency of cybersecurity needs in various industries.

Conclusion

Zscaler's pricing strategies for cybersecurity products are characterized by a strong subscription basis, value-driven pricing strategies that cater to customer needs, and a focused approach to industry-specific customization. This blend positions them effectively within a highly competitive market landscape, facilitating growth and deepening client relationships.