Executives and directors of cybersecurity company Palo Alto Networks have been hit with a shareholder derivative suit in California federal court alleging they misled investors about the success of its platform consolidation strategy, which was expected to result in lucrative government contracts.
According to the complaint, Palo Alto has attempted to ramp up its offerings to become a more comprehensive cybersecurity platform over the past several years. By consolidating certain products in existing platforms, its so-called platformization strategy aims to reduce the complexity of dealing with multiple solutions from multiple vendors, the suit states. However, the suit says the company failed to disclose that the consolidation and platformization initiatives were not driving increased market share to a significant degree.
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