 Welcome back everyone to theCUBE's coverage here in Seattle, Washington, Amazon Web Services, Artner Marketplace Seller Conference, combining their partner network with Marketplace, forming a new organization called AWS Partner Organization. This is theCUBE coverage, I'm John Furrier. Your host, we've got great CUBE alumnus here from Zscaler, a very successful cloud company doing great work. Stelio Delao, Senior Director of Cloud Business Development and Revesh Choo, VP of Public Cloud Partnerships at Zscaler. Welcome back to theCUBE, good to see you guys. Thanks for coming on. Thank you. Thanks for having us, John. So we've been doing a lot of coverage with Zscaler. What a great success story. I mean, the numbers are great, the business performance, it's in the top two, three, one, two, three, in all metrics on public company SaaS. So you guys check, good job. Yes, thank you. So you guys done a good job. Now you're here selling through the Marketplace. You guys are a world-class performing company in cloud SaaS. So you're in the front lines doing well. Now Marketplace is a procurement front-end opportunity for people to buy, hey, self-service, buy and put things together, sounds novel. What a great concept, great cloud-like. Yes. You guys are participating, and now sellers are coming together. The merger of the partner network with Marketplace, it feels like this is a second act for AWS. They go to the next level, they got their training wheels done with partners, now they're going to the next level. What do you guys think about this? Well, I think you're right, John. I think it is very much something that is in keeping with the way AWS does business, very Amazonian, they're working back from the customer. And what we're seeing is our customers in general, the market is gravitating towards purchase mechanisms and routes to market that just are lower friction. So in the same way that companies are going through their digital transformations now, really modernizing the way they host applications and they reach the internet, they're also modernizing on the purchasing side, which is super exciting, because we're all motivated to help customers with that agility. You know, it's fun to watch. And again, I'm being really candid and props to you guys as a company. Now everyone else is kind of following that. You could lift and shift, check by doing some things. Now they go, whoa, I can really build on this. People are building their own apps for their companies, going to build their own stuff, they're going to use piece parts, they're going to put it together in a really scalable way, that's the new normal. Okay, so now they're like, okay, I'm going to just buy through the market, I got purchasing power. So you guys have been a real leader with AWS. Can you share what you guys are doing in the marketplace? I think you guys are a nice example of how to execute the marketplace. Take us through. What are you guys offering there? What's the contract look like? Is it multi prongs? What's the approach? What do customers get if they go to the marketplace for Zscaler? Yeah, so it's been a very exciting story and been very pleasing one for us with AWS marketplace. We see a huge growth potential. There are more than 350,000 customers that are actively buying through marketplace today. We expect that number to grow to around a million customers by the next, I would say, five to 10 years. And we want to be part of this wave. We see AWS marketplace to be a channel where not only our resellers or our channel partners can come and transact, but also our GSIs, like Accenture want to transact through this channel. We are doing a lot in terms of bringing new customers through marketplace who want to not only close their deals, but close it like in the next few hours. And that's the beauty of marketplace, the kind of agility, the flexibility in terms of pricing that it provides to ISVs like us. If a customer wants to delay their payments by a couple of quarters, marketplace supports that. If a customer wants to do monthly payments, marketplace supports that. And we're seeing a lot of customers, big customers that have signed EDPs, enterprise discount plans with AWS. These are like multi-year cloud commits. Coming to us and saying we can retire our EDPs with AWS if we transact your solution through AWS marketplace. So what we have done as of today, we have all of our products and services enabled through AWS marketplace. What that means for customers, they can now retire their EDPs by buying Zscaler products through AWS marketplace and return, get the full benefit of maximizing their EDP commits with AWS. So you guys are fully committed, no toe in the water as we heard. You guys are all in. Absolutely, it's exactly the way to put it. We're all in, all of our solutions are available in the marketplace. And as you mentioned, we're a SaaS provider. So we're one of the vendors in the marketplace that have SaaS solutions. So unlike, you know, a lot of, I think customers and even the market in general associate the marketplace for historical reasons, the way it started with a lot of monthly subscriptions and kind of just dipping your toe in it from a consumer perspective. Whereas we're doing multi-million dollar, multi-year SaaS contracts. So the most complicated kinds of transactions you'd normally associate with enterprise software we're doing in very low friction ways through the marketplace. On the Zscaler side, going in low friction. Yeah, that's right. How about the customer experience? So it is primarily the customer that experiences. Yeah, they're driving it and it's because rather than traditional methods of going through paperwork. What are some of the things the customers are saying about this? Because I see two benefits. Obviously the friction, it's a channel. Okay, for Zscaler, that's to be clear. But now you have a customer who's got a lot of Amazon there, a trusted partner too. So why wouldn't they want to have one point of contact to kind of use their purchasing power and you guys are okay with that? We're absolutely okay with it. The reason being we're still doing the transaction and we can do the transaction with our, we're a channel first company. So that's another important distinction of how people tend to think of the marketplace. We go through channel, a lot of our transactions are with traditional channel partners and you'd be surprised the kinds of, even the telcos, the carrier providers are starting to embrace marketplace. So from a customer perspective, it's less paperwork, less legal work. I'd love to get your reaction to something because I think this highlights to me what we've been reporting on with theCUBE, with SuperCloud and other kind of trends that are different in a good way, kind of taking it to the next level. And that is that, if you look at Zscaler's SaaS. SaaS is self-service, the scale is efficiencies. Marketplace first started out kind of as a self-service catalog, a website, you know, click and choose, but now it's a different, he calls it a supply chain, like a CICD pipeline, a buying software, he mentions that and there's also services, people with the channel partners can come in, the GSIs, global system integrators can come in. So it's more than just a catalog now. It's kind of self-service procurement, more than it is just a catalog of buy stuff. Yes. So yeah, I feel CIO's ceasers of today should understand what marketplace brings to the bear in terms of like different kinds of services or Zscaler solutions that they can acquire through marketplace and other ISV solutions for that matter. I feel like we are at a point after the pandemic where there'll be a lot of digital exploration and companies can do more in terms of not just marketplace, but also including the channel partners as part of the deal. So you talked about channel conflict, AWS address test by bringing a program called CPPO into picture, channel partner private offers. What they does is we're not only like bringing all our channel partners into deals for renewals as well, they're the partner of record and they get paid alongside with the customer. So AWS does all the heavy lifting in terms of disbursements or payments to us, to the channel partner. So it's a win-win situation for all. I mean private offers and cost sales been very popular. It has been and that is our bread and butter in the marketplace. Again, we do primarily three year contracts and so private offers work super well. It's very nice thing for us as a vendor is it provides a great amount of flexibility. Private offer gives you a lot of optionality in terms of how the constructs of the deal and whether or not you're working with a partner, how the partner is utilizing as well to resell to the end user. So we've always talked about AWS giving IT agility. This gives purchasing and in finance business agility. Yeah, and I think this comes up a lot. I just noticed this happening a lot more where you see dedicated sessions, not just on DevOps and all the goodies of cloud, financial strategy, seeing a lot more conversation around how to operationalize the business transactions in the cloud. This is a new kind of, I mean it's not new, I mean something around, but not at a tech conference. You don't see that. So I got to ask you guys, what's the message to the CISOs and executives watching the business people about Zscaler and the marketplace? What should they be looking at? What is the pitch for Zscaler for the marketplace buyer? So I would say that we are a cloud-delivered network security service. We have been in this game for more than a decade. We have years of early head start with lots of features and functionality versus the competitors. If customers were to move into AWS cloud, they can get rid of their next-gen firewalls and just have all the traffic routed through our Zscaler internet access and use Zscaler private access for accessing the private applications. We feel we have done everything in our capacity in terms of enabling customers through marketplace and we'll continue to participate in more features and functionality that marketplace has to offer. And we would like these customers to take advantage of their EDPs as well as their time and spend for the multi-commit through AWS marketplace. Learn about what we have to offer and how we can really expedite the motion for them if they want to procure our solutions through marketplace. You know, we've seen an ability for them to get more creative, more progressive in terms of the purchasing. We're also doing, we're really excited about the ability to serve multiple markets. So we've had an immense amount of success in commercial. We also are seeing increasing amount of public sector, U.S. federal government agencies that want to procure this way as well for the same reasons. So there's a lot of innovation going on. Fed ramp going on, you got all those certifications. Exactly right. So we are the first cloud-native solution to provide IL-5 ATO as well as Fed ramp high and we make that all available GSA schedule pricing through the AWS marketplace. Again, through FSIs and other resellers. I mean, public private partnerships have been a big factor having that span of capability. I got to ask you about, this is kind of a cool conversation because now you're like, okay, sell them through the marketplace. Companies themselves are changing how they operate. They don't just buy software that we used to use, so general purpose bundled stuff. Oh yeah, I'm buying this product because this has got a great solution and I have to get forced to use this firewall because I bought this over here. That's not how companies are architecting and developing their businesses. It's no longer buying IT. They're building their company digitally. They have to be the application. So they're not sitting around saying, hey, can I get a solution? They're building and architecting their solution. This is kind of like the new enterprise that no one's talking about. They're kind of got to do their own work. Yes. There's no general purpose solution that maps every company. So they've got to pick the best piece parts and integrate them. Yes, and I think- Do you guys agree with that? Yeah, I agree with that and customers don't want to go for point solutions anymore. They want to go with a platform approach. They want to go with a vendor that can not only cut down their vendors from multi-dozens to maybe dozen or less. And that's where we kind of have pivoted with that platform-centric approach where we not only help customers with cloud network security, but we also help customers with cloud-native application protection platform that we just recently launched. It's gone by the name of the different elements include cloud security, pasta management, cloud identity, event management. And so we are continuously doing more and more on the configuration and vulnerability side space. So if a customer has an AWS S3 bucket that is open, it can be detected and can be remediated. So all of those like proactive steps we are taking terms of enhancing our portfolio, but we have come a long way as a company with as a platform that we have evolved in the marketplace. What's the hottest product? The hottest product? In marketplace right now. Well, the fastest growing products include our digital experience products and we have new cloud protection. So we've got posture and workload protection as well. And those are the fastest growing. For AWS customers is strong affinity also for ZPA which provides you zero trust access to your workloads on AWS. So those are all the most popular in the marketplace. So I would like to add that we recently launched and this has been a few years, couple of years. We launched a product called Zscaler Digital X, the ZDX. And what that product does is like, let's say you're making a Zoom call and your Wi-Fi network is laggy or it's a Zoom server that laggy. It kind of detects where is the problem and it further tells the IT department like you need to fix either the server on which Zoom is running or fix your home network. So that kind of is the beauty of the product. So I think we are seeing massive growth with some of our new additions in the portfolio which is kind of long-term coming. Yeah, and certainly a lot of growth opportunities for you guys as you come in. Where do you see Zscaler's big growth coming from product-wise? What's the big push? I'll say this is great upside for you here. Yeah. On the go-to-market side, where's the big growth for Zscaler right now? So I think we are focused as a company on zero trust architecture. We want to securely connect users to apps, apps to apps, like workloads to workloads and machines to machines. And we want to give customers an experience where they have direct access to the apps that's hidden from the outside world and they can securely connect to the apps in a very assessing fashion. Like, you know, the user experience is second to none. A lot of customers use this on the Microsoft 365 side where they see a lag in connecting to Microsoft. Office 365 directly, they use ZIE service to kind of securely connect. Yeah, latency kills, latency kills as we always say, you know, and security. I look the patterns so you want to see that data. And yeah, and emerging use cases. I mean, there is an immense amount of white space and upside for us as well and emerging use cases like OT, 5G, IoT, federal government, DOD, security at the edge. Absolutely. Where's the big edge? What's the edge challenge right now? If you have to put a finger on the edge is right now that's the hot area. We're watching that. It's going to be highly contested. It's not yet clear. I mean, it certainly hybrids the operating model cloud, distributed computing, but Edge has got unique things that you can't really point to on-premises. That's the same. Highly dynamic. You need high bandwidth, low latency, compute at the edge. The data has to be processed right there. What's the big thing with the edge right now? So that's probably an emerging answer. I mean, we're working with our customers. They're inventing and they're kind of finding use cases for those edge. But the good thing about, one of the good things about Zscaler is that we are able to, we've got low latency at the edge. We're able to work as a computer at the edge. We work in outposts, snowball, snow cone, there's no devices. So we can be wherever our customers need us, mobile devices. There are a lot of applications where we've got to be there on embedded devices, on tractors, providing security for those IoT devices. So we're pretty comfortable with where we are. That's why you guys are financially doing so well and performance wise. I got to ask you though, because I think that brings up the great point. If, this is why I like the marketplace. If I'm a customer, the edge is highly dynamic. It's changing all the time. I don't want to wait to buy something. If I got my solution architects on a product, I need to know, I'm going to have zero trust built and I'm going to, I need to push the button on Zscaler. I don't want to wait. So how does the procurement side impact? What have you guys seen, share your thoughts on how marketplace is working from the procurement standpoint? Because it seems to me to be fast. Is that right? Or is it still slow on their side, on the buyer side? Because this to me would be a benefit to developers if we say, hey, the procurement can just go really fast. I don't want to go through a bunch of PO approvals or slow meetings. It can't be. That manifests itself in several ways, John. It can't be, for instance, somebody wants to do a PLC and traditionally you can take any amount of time to get budget approval, take it through. What if you had pre-approved cloud budget and that was spent primarily through AWS Marketplace because it's console data on your AWS invoice. The ability to purchase a POC on the marketplace could be done literally within minutes of the decision being made to go forward with it. So that's kind of a front end, early stage use case. We've got examples we've been talking about on our recent earnings call of how we have helped customers bring in their procurement with large million-dollar, multi-million-dollar deals, even when a reseller's been involved, one of our reseller partners, being able to accelerate deals because there's so much less legal work and traditional kind of bureaucratic effort. And that agility and purchasing process has allowed our customers to pull in to the quarter or the end of month or end of quarter for them, deals that would have otherwise not been able to be done. So this is a great example of where you can set policy and kind of create some guardrails around innovation and integration deals, knowing if it's something that the edge is happening, you say, okay, here's some budget. We approved it, or Amazon gives credits and partnership going on there. I'd say, hey, we'll green light this, not to exceed a million dollars or whatever number that might in their range of, and then let people have the freedom to execute. You're absolutely right. So from the purchasing side, it does give them that agility. It eliminates a lot of the processes that would push out a purchase in actual execution past when the business decision is made. And quite frankly, to be honest, AWS has been very accommodative. They're a great partner. They've invested a lot in marketplace, marketplace programs to help customers do the right thing and do it more quickly as well as vendors like us to help our customers make the decisions. I mean, it's a rising tide. Rising tide floats all boats and you guys are a great example of an independent company highly successful on your own. Yep. Certainly the numbers are clear, Google Wall Street loves C-scaler, and economics are great. Our customer C-set numbers are off as well. Customers are great, and now you've got the marketplace. Again, this is, again, a new normal, a new kind of ecosystem is developing where it's not like the old monolithic ecosystems. The value creation and extraction is happening differently now. It's kind of interesting. Yes, and I feel we have a long way to go, but what I can tell you is that C-scaler is in this for the long run. We are seeing some of the competitors erupt in the space as well, but they have a long way to go. What we have built requires years worth of R&D and features and thousands of customers use cases which kind of lead to something what C-scaler has come up with today. What we have is very unique and it's going to continuously be an innovation in the market in the years to come in terms of being more cloud-savvy or more cloud-focused or more cloud-native than what the market has seen so far in the form of next-gen firewalls. And I know you guys got a lot of AI work. We've had many conversations with Howie over there, great stuff, and really appreciate you guys participating in our super-cloud event we had, and we'll see more of that when we're talking about the next-generation clouds, really enabling that new, disruptive, open, spanning capabilities across multiple environments to run cloud-native modern applications at scale and secure. Appreciate your time to come on theCUBE. Thank you. Thanks for having us. I really appreciate it. C-scaler, a leading company here on theCUBE talking about their relationship with marketplace as they continue to grow and succeed as technology goes to the next level in the cloud. Of course theCUBE's covering it here in Seattle. I'm John Furrier, host, thanks for watching.