CrowdStrike seeing huge growth in MSSPs as it targets SMB market
The security giant is investing heavily in its channel efforts to reach smaller customers, says CrowdStrike co-founder and CEO George Kurtz
CrowdStrike is seeing huge growth through managed security service providers (MSSPs) as it increasingly targets small and medium-sized businesses with its cloud-native cybersecurity platform, co-founder and CEO George Kurtz said on Tuesday.
Annual recurring revenue generated through MSSPs more than doubled in the company's fiscal 2023, which ended January 31, and CrowdStrike now generates 83 per cent of its overall revenue through channel partners, Kurtz said during the Austin, Texas-based company's quarterly call with analysts.
"Strategically expanding and investing in our partner ecosystem, with a goal of further expanding our reach within the enterprise — as well as down-market in the SMB — is one of our top initiatives in FY24," he said.
Kurtz made the comments as CrowdStrike reported results for the fourth quarter of its fiscal 2023, which beat Wall Street analyst estimates on both revenue and profits.
The vendor's stock price rose seven per cent in after-hours trading Tuesday, to $133.75 a share.
CrowdStrike is aiming to reach more SMBs in part through its Falcon Go platform, an affordably priced version of its Falcon unified security platform that's landed more than 1,000 net new customers for the company in just over two quarters, Kurtz said.
"We believe this early success reaching the ‘S' in the SMB demonstrates the immense demand for CrowdStrike's best-in-class endpoint protection, even among the smallest and [most] cost-conscious organisations," he said.
To help accelerate the vendor's expansion in the SMB market, Kurtz noted that CrowdStrike hired Daniel Bernard in the newly created role of chief business officer in January. Bernard — who CrowdStrike poached from rival security vendor SentinelOne — has taken on overseeing both the CrowdStrike channel program and the company's SMB growth initiative overall, Kurtz said.
While CrowdStrike is still in the "early innings of our SMB journey," the opportunity looks "very favourable."
How did CrowdStrike fare in Q4?
For CrowdStrike's fiscal Q4, revenue climbed 48 per cent, year on year, to $637.4m, the company reported. That slightly surpassed analyst expectations for the quarter.
ARR also grew by 48 per cent from a year earlier for CrowdStrike, reaching $2.56bn as of the end of January, including $221.7m in net new ARR during the quarter.
"CrowdStrike is executing exceptionally well in a challenging macro environment," Kurtz said, pointing to indicators including quarterly records in net new ARR and net new customers.
Ultimately, the "dual mandate of high efficacy and low total cost of ownership" that many customers now have for security "plays to CrowdStrike's strength as a leading consolidator," he said.
On earnings, the company reported non-GAAP net income of 47 cents per diluted share for its fiscal Q4, above the 43 cents per diluted share that had been expected by analysts.