Four Companies Leading the Rise of Cybersecurity

Feb 2, 2021

Today, it’s probably only a matter of time before a company faces a major cyber event. Software management company SolarWinds’ time came in December 2020. In what some describe as the largest cyberattack in U.S. history, perpetrators introduced a vulnerability in the company’s Orion software that could potentially allow an attacker to compromise the server on which the software runs. The scary part is that the attack hit key federal agencies and organizations, perhaps compromising national security. Early estimates are that roughly 250 organizations were affected.

Cyber threat events in the U.S. and around the world are increasingly pervasive and sophisticated. The upward trajectory in the number of cyberattacks is expected to increase global security spending from approximately $125 billion in 2020 to $175 billion by 2024.1 Contributing to this growth is the accelerating migration to the cloud. Currently, only one-third of total workloads use cloud computing technology. As that number increases, more spending on cybersecurity will be needed to help prevent malicious attacks.2 Similarly, the rapid adoption of more internet-enabled devices also creates new targets for hackers who want to steal or ransom valuable data.

In this piece, we highlight four companies that are key players in the cybersecurity theme:

  • CrowdStrike: A leading Endpoint Protection Platform
  • Zscaler: A cloud-native platform offering Secure Web Gateways
  • Okta: A key player in the Identity Access Management vertical
  • Mimecast: A top provider of solutions that detect and block malicious emails

It is projected that over 380 million individuals had their data compromised in 20203

Number of Data Breaches in the U.S.

CrowdStrike: A Leading Endpoint Protection Platform

CrowdStrike is one of the leading cybersecurity companies in endpoint protection platforms (EPP), which helps customers to secure end-user devices such as mobile devices, laptops, and servers. CrowdStrike’s solution is a software-as-a-service (SaaS) that works continuously to detect and analyze threats. The solution is a 100% cloud-based architecture, which gives CrowdStrike a competitive advantage versus legacy, non-cloud incumbents. The company can set up its solution quickly and effectively in many different IT environments. For example, in the company’s Q4 fiscal year (FY) 2020, the company onboarded Target as a new client in just 10 days.

In the past, on-premises anti-virus software prevented cyberattacks by monitoring and scanning known threats in end-point files. But that security layer is largely reactive. Today’s best offerings leverage AI. CrowdStrike’s AI offering is called Threat Graph, the brains behind the company’s AI-enabled cybersecurity solutions. Threat Graph can help CrowdStrike handle 4 trillion cyber events per week and make 50 million decisions per minute.4 The data sets are processed in CrowdStrike’s cloud, creating a network effect where, the more data analyzed across customers, the better Threat Graph AI-technology becomes.

Cloud-based solutions can translate into robust recurring revenues. As of Q4 FY2020, CrowdStrike generated 92% of its total revenue from subscriptions.5 Also notable is that CrowdStrike has maintained a net dollar revenue retention rate higher than 120% since Q1 FY2019.6 A rate greater than 100% means that there is net growth from an existing customer base, either through price increases or upselling opportunities.

CrowdStrike's Net Dollar Revenue Retention Rate & Active Clients

Zscaler: A Top Player in Secure Web Gateways

Zscaler is another 100% cloud-based cybersecurity platform, so there is no hardware to buy or manage, and the platform is always up to date. Zscaler makes 175,000 security cloud updates per day.7 Zscaler’s Secure Web Gateways (SGW) solutions primarily focus on giving customers secure access to internally managed applications, like corporate emails, through its Zscaler Private Access (ZPA). They also provide solutions for external applications, like customer relationship management (CRM) software, through Zscaler Internet Access (ZIA). A Secure Web Gateway prevents unsecured traffic from entering an internal network through external web applications. Zscaler is like a middleman, connecting users directly to applications without going through their network.

Zscaler offers capabilities that could eventually render the use of virtual private network (VPN) technologies obsolete. The company’s ZPA solution is easier to deploy, easier to manage, and more secure than traditional VPN solutions. ZPA provides users with access to internal apps, without the need to connect to a company’s network or expose those users to the internet. This architecture also completely limits the ability of a cyberattack to move horizontally across the network during a breach. The company describes this architecture as a Zero Trust Network, never extending the network to all users. Essentially, the network becomes deemphasized and the internet becomes the new corporate network.8

Securing access to internal and external apps on laptops, smartphones, and other Internet of Things (IoT) devices is now a top priority for organizations, particularly with remote and hybrid work going mainstream. According to research firm Gartner, by 2023, 60% of enterprises will phase out most of their remote access VPNs in favor of Zero Trust Networks like Zscaler’s offering.9

Zscaler’s net dollar revenue retention rate hit the 120% level as of the end of Fiscal Year 2020, indicating continued growth among its existing user base.10 Importantly, the company believes it has a 6x upsell opportunity with existing customers on ZIA and ZPA alone.11

Zscaler's Net Dollar Revenue Retention Rate & Active Clients

Okta: A Fast-Growing Company in Identity Access Management

Okta is a leading cybersecurity company in the Identity Access Management (IAM) vertical. This vertical focuses on enabling the right individuals and employees to access the right resources at the right times for the right reasons.12 Multi-factor authentication (MFA), application programming interface (API) access management, and single sign-on (SSO) are a few identity solutions that companies increasingly leverage to ensure the right users are authorized to access different applications.

Companies in the IAM vertical are also expected to benefit from the shift towards remote and hybrid work environments. With employees working from multiple locations and connecting from different devices, IAM lets IT departments monitor who’s accessing specific apps at a given time. IAM also helps companies to monitor and secure points of access given to contractors or customers that must access certain internal applications.

From an end-user standpoint, Okta’s IAM solutions provide access to all applications within a single portal. This feature reduces login-related helpdesk calls by 50% and makes it 50% faster for users to log in and use new apps.13 Okta estimates the total addressable market for workforce identity is $30 billion and the market for customer identity is $25 billion.14

Similar to CrowdStrike and Zscaler, Okta’s solutions are cloud native. Ninety-four percent of the company’s revenue is recurring, as it’s generated from subscription services. Okta is another company with solid net dollar revenue retention figures, registering 123% for the trailing 12-month period in Q3 FY2021, a 2% increase from previous quarter.

Okta's Net Dollar Revenue Retention Rate & Active Clients

Mimecast: A Top Provider in Email Security

Mimecast is a top player in probably the best-known type of cybersecurity vertical, Secure Email Gateways. Ninety-five percent of cyberattacks leverage email, making it the preferred channel for opportunistic and targeted attacks.15 Mimecast’s opportunity set is significant, with approximately 1 billion worldwide business email users.16 Today, the company has roughly 15 million users, or 1.5% penetration of the total global market.17

The goal of mass phishing and targeted spear-phishing attacks is to appeal to recipients with a message that resonates with them and coerces them into an action.18 Attackers want to steal money or critical data like intellectual property. Between October 2013 and May 2018, the FBI estimates that $12 billion dollars were lost from email compromise.19 Email phishing and impersonation fraud are ever-present today, but the COVID-19 pandemic makes the environment ripe for even more such behaviors with people spending more time online. In fact, email phishing and impersonation fraud increased by 30% in the first 100 days of COVID-19 alone.20

Mimecast provides solutions that detect and block emails that include known or unknown malware, malicious URLs, and impersonation of senior staff members or third-party organizations like banks, federal agencies, or even customers and suppliers. Mimecast complements its traditional detection techniques with AI features such as deep learning to identify images and logos not safe for work, machine learning to detect anomalous risky patterns in emails, and supervised learning to categorize high risk links.

Mimecast also implements a cloud-native architecture, combining agility with an attractive business model. The company has sustained a net dollar revenue retention rate above 100% over the last few years, adding to the strength of cybersecurity companies’ business models.21

Mimecast's Net Dollar Revenue Retention Rate & Active Clients


Cybersecurity not only grabs headlines these days, it also grabs budgets. The growing number of cyberattacks and their potential implications for sectors and governments worldwide makes cybersecurity tools indispensable for organizations to operate securely across multiple business functions. Whether it’s email, identity management, access to internal and external apps, or protecting end-user devices, the four companies highlighted here are key players in keeping this increasingly digital world safer and exemplify the multi-faceted nature of the cybersecurity industry.

Related ETF

BUG: The Global X Cybersecurity ETF seeks to invest in companies that could benefit from the increased adoption of cybersecurity technology. Companies include those whose principal business involves the developing and managing security protocols to prevent intrusion and attacks on systems, networks, applications, computers, and mobile devices.

Click the fund name above to view the fund’s current holdings. Holdings subject to change. Current and future holdings subject to risk.

Investing involves risk, including the possible loss of principal. Cybersecurity Companies are subject to risks associated with additional regulatory oversight with regard to privacy/cybersecurity concerns. Declining or fluctuating subscription renewal rates for products/services or the loss or impairment of intellectual property rights could adversely affect profits. The investable universe of companies in which BUG may invest may be limited. The Fund invests in securities of companies engaged in Information Technology, which can be affected by rapid product obsolescence and intense industry competition. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. BUG is non-diversified.This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.

Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns.

Carefully consider the funds’ investment objectives, risks, and charges and expenses. This and other information can be found in the funds’ full or summary prospectuses, which may be obtained at Please read the prospectus carefully before investing.

Global X Management Company LLC serves as an advisor to Global X Funds. The Funds are distributed by SEI Investments Distribution Co. (SIDCO), which is not affiliated with Global X Management Company LLC.