As another volatile earnings season rolls on this week, we highlight data reviews for Okta, CrowdStrike, Zscaler, SentinelOne, Elastic, and MongoDB. All of the spending intentions data cited in this article is derived from our most recent APR23 TSIS. Please note that the JUL23 TSIS will be launched in the coming weeks and provide 2H23 spending intentions from our qualified ITDM community. If you would like to access any of ETR's proprietary data and research, log into our comprehensive platform or begin your own free trial with just one click.
Okta. In the April 2023 Technology Spending Intention Survey (TSIS), the security sector captured a Net Score of 21.1%, a decline from prior survey levels that dropped the sector’s NetScore to all-time lows. When isolating the Information Security sector data to Global 2000 organizations, Net Score dropped from 19% to 16.3% survey over survey. However, in ETR’s ongoing Macro Survey, more than 1,100 respondents cited Identity Access Management (SSO, MFA) as the highest-ranked information security priority for 2023, so amidst a declining tide, Okta and Auth0 remain relatively well positioned from a budget priority standpoint.
With the descending sector data as a backdrop, the aggregate Net Score across all respondents for Okta and Auth0 sits at 44%, down from 47% in the prior survey but still above the 39% lows of OCT22. When broken down by sector, Net Score for Auth0 remains incredibly stable despite a backdrop of declining IT budgets; meanwhile, citations have nearly doubled in the last twelve months. The core Okta division has not fared as well, with consecutive Net Score declines; however, spending intentions remain healthy at absolute levels.
The primary takeaway from this survey’s data set is that the combination of Okta and Auth0 remains dominant within the subsector that more than 1100 ITDM’s ranked as the number one security priority for their organization. Among all vendors within ETR’s Information Security sector with at least 50 citations, Auth0 has the 3rd highest Net Score, and Okta has the 6th highest. Okta also has the 6th highest Pervasion ranking among all Information security vendors. Auth0 ranks 2nd in Adoptions, and Okta ranks 11th. For Increase indications, Auth0 is 4th, and Okta is ranked in the sixth spot. In addition, Auth0 has the lowest Decrease ranking among all Information Security vendors at 1%. Quite simply, the Identity Access duo leads their marketplace, according to ETR’s data.
In sum, overall spending levels for the Okta and Auth0 combination remain healthy on an absolute basis and are dominantly positioned relative to the broader sector backdrop. The vendor’s positioning within the highest-ranked priority for information security adds credence to this survey’s healthy data set, leaving the positive outlook intact. See the full report here.
CrowdStrike. Based on the most recent TSIS data, CrowdStrike maintains one of the highest Net Scores in the Information Security sector (N>50) while continuing to grow its Pervasion in our sample among large enterprises. Across all customers, CrowdStrike’s Net Score remains above 50% as customer acquisition and expansion rates remain healthy. Net Score has come down slightly y/y from 57.6% to 51.3% due to a slight downtick in adoption rates. However, 46% of CrowdStrike customers in our sample plan to increase spend, a higher rate compared to 44% one year and 39% two years ago. In sum, elevated expansion rates, continued customer growth, and strong competitive positioning in the Information Security sector keep us Positive on CrowdStrike’s 2023 data set. See the full report here.
Zscaler. This was a tough one. Among all respondents, Zscaler’s Net Score is declining y/y and s/s due to fewer plans to increase spend; 33% of customers in our sample plan to increase spend in 2023 compared to 42% in 2022. When narrowing down to Fortune 500 accounts (N=70), this decline is even more evident versus January data as large enterprise customers shift to flattening spend. However, healthy positioning in the Information Security sector, along with strong Pervasion and Adoption rates, keep us Positive on the data set while noting sequential declines among Fortune 500 customers and a transition from Increase to Flat spend indications amongst the current environment. See the full report here.
SentinelOne. Across all customers, SentinelOne’s Net Score declined from year-ago levels due to fewer plans to adopt or increase spend coupled with growing ‘Decrease’ and ‘Replace’ indications; 32% of customers in our sample plan to increase spend in 2023 compared to 43% in 2022, and 14% of customers in our sample plan to spend negative with the vendor vs. 7% one year ago. To put this deceleration into context, the y/y decline in Net Score for SentinelOne is the largest magnitude across all EDR/MDR/XDR peers as well as most of the Information Security sector. The dataset also shows some weakening from the original 2023 plans captured in January, with several repeat respondents shifting from the ‘Increase’ to the ‘Flat’ bucket. In sum, weakening spending intentions among Global 2000 customers and challenging competitive positioning lead us to a Negative viewpoint on SentinelOne’s dataset. See the full report here.
The following vendors' data sets did not warrant an outlook in the most recent APR23 TSIS survey, so we will briefly review the higher-level takeaway on each vendors spending intentions.
Elastic. Revisiting the OCT22 TSIS report, ETR wrote: “Strong market positioning versus peers and growth within Information Security Net Score offset concerns of broader declining spending, resulting in a continued positive outlook.” In the JAN23 survey, those trends reversed, with longer-term declines in aggregate Net Score, growing Replacement rates, and weakening competitive positioning within a crowded Observability market warranting a step down to Neutral on Elastic’s data set. The most recent survey captured a transition from Increase to Flat indications, pushing aggregate Net Scores lower again for the 5th consecutive survey period. See the full report here.
MongoDB. Among all customers, MongoDB’s Net Score is down from year-ago levels (APR22) and slightly down versus JAN23 data due to more plans to spend ‘Flat’ with the vendor; 30% of customers plan to increase spend in 2023 compared to 37% in APR22. The largest decline in spending intentions for MongoDB is coming from Small organizations (N=44). Spending intentions data within Global 2000 accounts sees a similar trend, well above the lows in Net Score captured in 2H22 but below JAN23 and APR22 levels due to fewer plans to ‘Increase’ spend; 29% of Global 2000 customers (N=92) plan to increase spend in 2023, compared to 42% when ETR polled for original calendar year budgets in January. See the full report here.
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Enterprise Technology Research (ETR) is a technology market research firm that leverages proprietary data from our targeted IT decision maker (ITDM) community to provide actionable insights about spending intentions and industry trends. Since 2010, we have worked diligently at achieving one goal: eliminating the need for opinions in enterprise research, which are often formed from incomplete, biased, and statistically insignificant data. Our community of ITDMs represents $1+ trillion in annual IT spend and is positioned to provide best-in-class customer/evaluator perspectives. ETR’s proprietary data and insights from this community empower institutional investors, technology companies, and ITDMs to navigate the complex enterprise technology landscape amid an expanding marketplace. Discover what ETR can do for you at www.etr.ai