Mizuho analyst Gregg Moskowitz recently hosted a conference call with a senior account executive at a large tech transformation vendor.
The expert cited a generally softer demand environment in April and May due to macro challenges. He became bullish in recent months, characterized by solid demand in June and July.
Regarding the 2023 demand, Moskowitz was optimistic yet concerned. He cited "unprecedented activity levels" for IaaS and PaaS solutions leading to heavier engagement on cloud adoption frameworks, application transformation (including container deployments), and cloud security.
Moskowitz also noted strength in public cloud demand for each of the significant hyperscalers (Azure, AWS, and GCP). He stated that demand for observability remains strong and expects this will continue.
Moskowitz expects a meaningful uptick in vendor consolidation within observability over the coming years. The high demand for cybersecurity solutions has continued, with primary drivers including growing operational complexity for organizations, the rise in sophisticated cyberattacks, and the ongoing transition to cloud technologies. He saw more runway for the demand for the firewall.
More specifically, to Microsoft Corp (NASDAQ: MSFT), the expert stated that larger enterprise cloud migrations to Azure proceeded well. He saw the March price hikes for its Microsoft 365 and Office 365 commercial products not negatively impacting buying behavior.
Meanwhile, the expert noted that demand for his Snowflake Inc (NYSE: SNOW) practice has been robust. Furthermore, most of his clients looked to add more, even in this environment.
The expert noted that traction for his Splunk Inc (NASDAQ: SPLK) practice has been excellent, with demand built for SPLK's Observability Cloud suite. Still, he stated that SPLK remains an expensive product, which he thinks opens the door for alternatives.
CrowdStrike Holdings, Inc's (NASDAQ: CRWD) traditional endpoint security business has recently experienced a little more softness and cited a modestly more elevated competitive environment. He also referred to CRWD as a "go-to-market juggernaut" and stated that demand for Humio has started to pick up.
Meanwhile, the expert's Palo Alto Networks, Inc (NASDAQ: PANW) business has had "an exceptional year," with demand continuing to be very good overall. He believed Okta, Inc's (NASDAQ: OKTA) security incident has continued to linger in the minds of some of his customers.
Net, his OKTA business continues to grow, but likely at somewhat reduced rates. The expert cited good traction for his Cloudflare, Inc (NYSE: NET) practice and is bullish on its SASE growth prospects, albeit it remains very early.
