Netskope, a cybersecurity firm specializing in cloud security solutions, recently enlisted Morgan Stanley for its upcoming IPO — joining the list of tech companies looking to tap the equity capital markets for funding. Targeting a Q3 2025 IPO in hopes of raising $500 million, Netskope is approaching a pivotal moment as it prepares for its public debut.
Below, we leverage expert transcripts and other insights from the AlphaSense platform to explore Netskope and the competitive dynamics shaping the cybersecurity space.
Cybersecurity Spend Ramping Up as Priorities Shift
We are in a resilient cybersecurity spending environment, with IT budgets growing this year amid volatility — particularly across top priorities like security, IoT, and AI. A number of factors are driving an increased threat landscape that necessitates more cybersecurity spend. The rise of AI, machine learning, 5G networks, and quantum computing calls for more comprehensive cyber defense than ever before. Meanwhile, broad adoption of cloud-based genAI-powered applications is surfacing new cybersecurity vulnerabilities.
As a result, most firms are reporting that they expect their cybersecurity spending to keep rising in the near term. Broker research shows that 73% of businesses expect their cybersecurity budgets to increase in 2025, with only 3% anticipating a decline. A separate survey finds that, within cyber, data security and cloud security are the highest priorities: 91% and 88% of respondents, respectively, say they plan to spend more on these areas in 2025 than in the year prior.
Even as cybersecurity spending is on the rise, organizations are adopting a more strategic approach regarding how that spending is allocated. Experts note that companies are increasingly prioritizing one-stop-shop security platforms amid challenging business conditions and more heavily scrutinized IT budgets. Major players like CrowdStrike, Palo Alto, Cisco, and Google have led this shift.
Could Cyber M&A Accelerate?
The drive for one-stop-shop cybersecurity solutions has led to high-profile M&A deals such as Google’s recent acquisition of Wiz and Palo Alto’s proposed acquisition of CyberArk. One expert predicts that Cisco and other traditional vendors might follow suit, acquiring innovative cybersecurity assets to ameliorate their portfolios. For cloud security start-ups like Wiz, expanding through acquisitions or partnerships is seen as a viable strategy to become an integrated platform.
Some experts expect this M&A trend to continue, anticipating a wave of industry consolidation that could reshape the cybersecurity landscape.
“We're about to go through a wave of consolidation, a wave of M&A that frankly I've not seen in the cybersecurity industry. We're about to go through a wave of platformization where two or three vendors are going to emerge as the dominant platforms of choice.”
– Industry Consultant and Long-Time Netskope Customer, July 2025 Call
While M&A is set to shift the cybersecurity landscape, it is also likely that given a healthier IPO backdrop, start-ups in the sector will look to follow Netskope’s lead and scale via the public market. The company headlines a widening field that includes both legacy players like Cisco and newer entrants such as Zscaler and Palo Alto Networks. Zscaler is considered Netskope’s biggest competition, as the two companies compete head to head for virtually every major cybersecurity deal. The arrival of these competitors has created a divide between high-end platform consolidators like Netskope and simple, cheap alternatives.
How has Netskope secured its advantage in this challenging environment? Currently, Netskope is viewed as a leader in security service edge (SSE) and secure access service edge (SASE) cybersecurity frameworks. Experts say its cloud-native, data-centric approach enables rapid adoption with minimal on-premises footprint, which resonates with enterprise customers seeking zero-trust security solutions. Netskope’s approach of bolstering its product capabilities through acquisitions is seen as contrasting with competitors that may have broader ecosystems but are seen as facing challenges in cohesive integration.
“When you look at the average enterprise, they have somewhere between 50-70 different products, typically from different vendors, that make up their overall security architecture. One of the highest priorities for every CIO and CISO is to continue to consolidate the number of products and vendors in order to really achieve simplification and ease of operations.
With Netskope, you're achieving that because what used to be six to eight to 10 different products is now replaced with their single cloud-native architected platform and all of the microservices that are running inside of that.”
– Former Director at Netskope, March 2025 Call
Gauging Netskope’s Post-IPO Prospects
Many experts are optimistic about Netskope’s odds of success going forward, pointing to the company's strong recurring revenue growth and SSE market leadership as compelling investment narratives. Strategic partnerships are another source of optimism: Netskope’s partnership with Microsoft, announced in late 2024, provides a significant competitive advantage by integrating Netskope's advanced SSE capabilities with Microsoft's Entra security platform. Netskope’s IPO should also improve the company’s visibility, reach, and credibility — potentially resulting in higher conversion rates and market share.
“I think Netskope will probably pick up some share just becoming a public company and getting that visibility is going to create some opportunities for them to get into customers and potentially close customers that have been a struggle to close in the past. I do expect them to probably bump up their market share by 10%-20% over the next couple years, thanks to that alone.
“I can tell you that in major accounts especially, we had at least five to seven deals a quarter that in my opinion, we lost because we were a private company. [Closing more of those deals] accounts for that 10%-20% uplift in market share that I think is possible once they go public.”
– Former Senior Manager at Netskope, July 2025 Call
Others see Netskope’s IPO as a stepping stone to an eventual acquisition. There is some concern that Netskope faces "a real path of resistance to the IPO" due to market consolidation pressures and what one expert refers to as “IPO fatigue” plaguing the cybersecurity space. Some believe that a Cisco-Netskope acquisition would be mutually beneficial, plugging gaps in Cisco’s SASE, zero trust, and data protection capabilities while offering Netskope increased scalability.
Cybersecurity Market Outlook
While Netskope may have a lead right now over other cloud-native cyber platforms, particularly in SSE, the race to market dominance is far from won. Experts see the arrival of new cybersecurity frameworks, like zero trust, as transformative to the industry. The rewards will be vast, according to one expert, who believes that, “The vendor that provides the most ability to comply with zero trust … is going to change the way the security architecture is going forward.”
As technology advances, AI capabilities are seen as a key differentiator between competitors. Netskope has made strides in this area. The company recently expanded its Netskope One platform to address AI-specific use cases, such as monitoring data fed into large language models and assessing AI model risks.
All told, experts believe that AI and other emerging technologies will create a cybersecurity landscape that looks completely different years from now compared with today’s environment. As such, continued investment into AI and other growth areas is seen as key to Netskope’s long-term prospects.
“AI is going to upend the entire cybersecurity field. If you're asking me how it's going to look two or three years from now, I think it's going to be completely different just based on the impact of AI and how that's going to help automate SOCs, it's going to automate detections, it's going to streamline a lot of the things that are today done by humans are not going to be done by humans.
I think from a tech stack perspective, just the architecture of a Netskope where we've built out this network that everything goes through to perform security scans on, that could potentially be an outdated architecture two or three years from now. You won't want to send your traffic all the way out to somebody else's network to do security scans on when you could potentially either containerize it somehow, like an enterprise browser.”
– Former Senior Manager at Netskope, July 2025 Call
Streamline Your Research With AlphaSense
Using the AlphaSense platform, investors can perform a deep dive on any company, including pre-IPO names like Netskope, with ease. Our Canalyst Models provide financial professionals with an extensive library of 4,000+ pre-built, highly accurate, and granular financial models that update automatically. Our company-specific IPO models, including for companies like Netskope, are available within days of filing, enabling faster, more confident decision-making.
AlphaSense's newly expanded Company Profiles and Financial Data are the first of their kind to unify the most comprehensive qualitative and quantitative market data, allowing users to build a complete company picture seamlessly and in seconds. Complete with historical financial data and sophisticated modeling capabilities, industry comps, broker research, news, and expert transcripts — performing a company deep dive has never been easier, or faster, so you can move forward with the decisions that affect your business.
Discover how AlphaSense can level up your investment research workflow. Start your free trial today.
Don’t miss our other AlphaSense primers:
- McGraw Hill and the Educational Publishing Market | An AlphaSense Primer
- Circle and the Stablecoin Market | An AlphaSense Primer
- Chime Financial and the Neobanking Market | An AlphaSense Primer
- Figma and the Creative Cloud Market | An AlphaSense Primer
- StubHub and the Global Ticketing Market | An AlphaSense Primer
- Klarna and the Buy Now, Pay Later Market | An AlphaSense Primer
