Why is Palo Alto Networks so successful?
"We are successful because we have disrupted the market," Zuk said. "We came out with technology that changed the market completely. When you disrupt the market, it is very difficult for the existing vendors to deal with it. They have two bad options-it is called the innovator's dilemma. Either they embrace the disruption or they ignore the disruption. Both are bad. The disrupter will slowly replace the incumbents."
"Our competitors did not embrace the disruption," he continued. "They tried to fight it. We call it 'putting lipstick on a pig.'"
The other success factor, Zuk said, is setting the right culture in the company. "We have a rule in Palo Alto Networks," he said. "Each and every employee must be proud of the work we are doing. The same can't be said about our competitors."
Even though Zuk is only the CTO of the company, he is mindful of his role as the company's founder. ""The job of the founder is to maintain the culture of the company," he said. "If he leaves or steps back, that's the end of the company. Many founders forget this."
Why did he choose to be only a CTO, not a CEO? "Because I am not a good CEO," he says matter-of-factly. "It is very rare that technical people could be good CEOs. Doesn't happen a lot."
In his early days at Palo Alto Network, Zuk gave a large part of his equity to the early employees (from his share). He did so because he thought it was fair. When he went public, he held about 6 percent of shares. Today, the company is worth US$12 billion. "It is better to have 6% of US$12 billion than to have 20% of 1 million," he said. "So, (in hindsight), it was a good investment."
Zuk is also well-known for hating bureaucracy. "At Palo Alto Networks, every employee is empowered to take decisions," he said. "When you centralize decision-making you create bureaucracy."
Palo Alto Networks' approach to security
Zuk thinks that the best way to fight the hackers and security threats is to increase the input price so high that it becomes a barrier for the criminals.
"You should be able to stop the attack," he argued. "If you just detect the attack, you are not going to increase the price of the attack. You have to stop a big number of attacks so that attacker will try many times and that will increase their price. So you have to be in a position to stop the attack. It means that you need to have a firewall. If you don't have it, you will not be able to stop the attack."
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