Security 2022: More hiring, more consolidation

With growing concerns about a widening economic slowdown, a few cybersecurity startups have cut staff recently. But at the RSA Conference in San Francisco this week, I spoke with top executives at a number of venture-backed security companies who say they have the opposite plans.

A number of them say they’re sticking to their aggressive hiring goals for the rest of the year, or even trying to pick up the pace — at least for now.

• “We’re not slowing down,” Peter McKay, the CEO of developer security firm Snyk, told me. The company, which was valued last year at $8.6 billion, employs 1,300 and aims to add another 200 people by the end of the year, McKay said.
• For strong security vendors, the weaker economic environment might have advantages: There’s a potential for greater availability of talent and less competition around hiring, he said. “We're going to use this opportunity to get the best talent we can get,” McKay said.

Assaf Rappaport, co-founder and CEO of cloud security startup Wiz, told me the same.

• The 350-person company, valued last year at $6 billion, is seeking to grow its staff to 750 or 800 employees by the end of the year.
• For some workers, the economic climate might mean people might be less drawn to “vision companies” and more “more to companies with a real business,” Rappaport said. If anything, “we’re not hiring fast enough,” he said.
• Executives at venture-backed cybersecurity companies including Armis, Orca Security, Illumio and Salt Security also told me they plan to continue hiring in the coming months in spite of the fears of a broader slowdown.

Things could change, of course, depending on how the economic situation unfolds, the executives acknowledged.

• But their optimism certainly reflects an expectation by industry experts that spending on cybersecurity will likely remain strong even in a downturn, due to regulatory forces and worsening cyber threats.
• At the same time, many security startups, particularly those that depend on raising VC funds, won’t necessarily be able to make it through a vastly different economic environment unscathed.

Without a doubt, many will be acquired, according to Dave DeWalt, the former CEO of FireEye and McAfee, and now founder and managing director of venture firm NightDragon.

• The security industry is “heading towards a consolidation window,” DeWalt told me. “I really think we're going to enter into the second half of 2022 with one [acquisition] after another,” including a number of “mega acquisitions and large combinations,” he said.

A MESSAGE FROM VERSAPAY

Fewer than half of executives (44%) see better communication with customers as a benefit of digitizing AR. Meanwhile, 72% state that their AR department isn't customer-oriented enough, implying that executives understand the need for customer-oriented AR departments, but aren't aware that they can close that gap as part of their AR digitization project.

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What could possibly go wrong?

Koch Industries and C3.ai are getting cozier. The companies announced a deal on Tuesday to extend their work together, allowing Koch Industries employees to use no-code AI tools.

A prominent donor to Republicans and conservative causes, Koch Industries and its subsidiaries in the oil, gas, paper and financial services industries will get access for another five years to AI-fueled machine-learning models and software from C3.ai. The companies first partnered in 2020.

C3.ai promises to “democratize AI” by making it easy for non-coders to create and use machine learning and predictive analytics tools for things like energy management, supply chain logistics and detecting faulty equipment. The company’s CEO, Thomas Siebel, is one of the enterprise AI industry’s most vocal proponents of using AI in support of “democratic values” and has actively sought U.S. military contracts for the company as a means of achieving that goal.

Koch Industries has been under the spotlight recently for fresh political contributions that could influence lawmakers to support the company as it continues its glass manufacturing subsidiary’s operations in Russia despite the country’s attacks on Ukraine.

In a statement about the extended agreement, C3.ai said Koch’s employees will get access to its no-code AI Ex Machina software. Low- and no-code AI tools have been criticized for making potentially risky AI easier for people to use without proper training on data privacy and security, as well as the implications of automating faulty, inaccurate or biased decision-making tech.

Enterprise moves

Over the past week Zoom, 1Password and Intel added new C-suite members, Amazon lost a key executive to Flexport, and more.

Greg Tomb is the new president of Zoom. Tomb was previously VP of Sales for Google Workspace, and was president of Global Cloud Sales at SAP prior to that.

Erin Zipes is the first chief legal officer at 1Password. Zipes was formerly assistant general counsel at Shopify.

April Miller Boise is the new chief legal officer at Intel. Miller Boise was previously at Eaton Corp., a power management technology company.

Dave Clark is joining Flexport as co-CEO. Clark will lead the logistics company with founder and CEO Ryan Petersen before becoming its sole chief executive. Clark was formerly the head of Amazon’s consumer business.

Rahul Agarwal is now a principal engineer at Microsoft. Agarwal was previously at AMD.

Satyen Yadav is the new CTO at Compute North. Yadav was previously CTO at Boeing and was head of Edge-to-Cloud IoT and Machine Learning at AWS.

Mark Hawkins was named to the board of directors at Cloudflare. Hawkins was previously the president and CFO of Salesforce.

Around the enterprise

Salesforce executives reiterated their commitment to working with the NRAduring an all-hands meeting on Wednesday despite employee protests over that relationship, Protocol’s Sarah Roach reported.

Maybe the SaaS recovery hasn’t quite materialized: DocuSign shares fell sharply after the company missed its earnings target by a wide margin.

Eric Schmidt and Peter Thiel are joining forces to encourage the government to invest up to $1 billion in domestic chipmaking, which both makes a lot of sense and is also very weird.

A MESSAGE FROM VERSAPAY

A resounding 96% of respondents claimed that there is work to do in digitizing their AR departments, yet 60% agreed that their AR departments haven’t been prioritized as much as other departments for digitization. At a time when the importance of securing cash flow is higher than ever, many businesses are not putting enough focus on it.

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