Former SoftBank executive Nikesh Arora will lead Palo Alto Networks



Palo Alto Networks
Inc.


PANW 0.53%

Friday called

Nikesh Arora,

an ex top

SoftBank Group
Corp.


9984 -0.04%

executive, as its next president and CEO, after years of rapid growth for the cybersecurity company.

Mr. Arora will succeed

Mark McLaughlin,

who joined Palo Alto Networks as CEO in 2011 and took the company publicly in 2012. He oversaw rapid growth at a time when high-profile cyber-attacks pushed corporations to beef up their security software investments.

In an interview, Mr. McLaughlin said that after nearly a decade of running publicly traded companies, he wants to spend more time with his family. He said he discussed the transition with the board for eight months. He will remain as vice president, a "client-oriented" role in which he said he will help with the client's defense and the company's relationship with the federal government.

With Mr. Arora, who will also replace Mr. McLaughlin as president, Palo Alto Networks wins a CEO with a reputation as a global agreement maker.

Mr. Arora was a veteran executive in

Alphabet
Inc. & # 39; s

Google, where as commercial director he supervised sales, customer service, marketing and technical support.

He pointed out his experience in helping Google develop globally.

"No, I have not worked in security," Arora said in an interview. "The need here is to lead a team of 5,000 people, shore up our global operations to continue climbing."

Mr. Arora said it was too early to go into the details of his strategy, but said he was attracted to helping companies find a way to stay safe while they make the transition to cloud computing. "I think it's a great opportunity," he said.

His tenure at Palo Alto Networks begins on June 6, the company said. Mr. Arora refused to comment on his compensation.

Mr. Arora said he plans to focus on continuing the company's current trajectory. "The question is how to take this here and 2x or 3x and keep climbing," he said.

At SoftBank, where he served as president and chief operating officer, Mr. Arora carried billions of dollars in investments. He was once considered successor to the CEO of the Japanese Internet and telecommunications company,

Masayoshi Son,

who personally chose the Silicon Valley trafficker to replace him. But Mr. Arora faced criticism from some SoftBank shareholders about his investment options for the company, and it went abruptly in 2016, two years after he was taken away from Google.

Mr. Arora defended its investment history on Friday. "Of the eight or nine investments I made, six are working really well, one is still to be seen and two did not work, now that's called portfolio management."

Palo Alto Networks sells next-generation firewalls, security products designed to keep malicious software out of corporate networks. When it was made public in 2012, annual revenues were $ 225.1 million. For fiscal year 2017, that figure had increased to $ 1,800 million as the company diverted sales from established suppliers as

Cisco Systems
Inc.

Y

Check Point Software Technologies
Ltd.

However, Palo Alto Networks has had consistent losses, in part due to the cost of stock-based compensation. Its loss was extended to $ 216.6 million in fiscal year 2017 from $ 192.7 million one year earlier.

The change at the top occurs when Palo Alto Networks looks for acquisitions to maintain its vertiginous growth in revenues. In March, the Santa Clara, Calif., Company spent $ 300 million on cloud security company Evident.io. The following month, he bought the Israeli cybersecurity company Secdo Ltd. The terms of that agreement were not disclosed.

When Palo Alto Networks went public, the shares were sold at a price of $ 42. The stock ended Friday with a half percent at $ 209.19. For the year, it has increased by 44%.

Mr. McLaughlin said that the company's strategy is to invest in its new security platform, for which it expects other developers to write software, something similar to a Windows operating system, but for security software.

Write to Robert McMillan at [email protected] and Rolfe Winkler at [email protected]

Appeared in the print edition of June 2, 2018 as & # 39 ; Cybersecurity Firm Picks New CEO. & # 39;

.


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