Cybersecurity covers software and services that protect networks, devices, cloud workloads, identities and data. MoatScope covers 37 companies here. Two have a wide moat, 17 a narrow moat and 18 none.
How the industry makes money
Security vendors earn mostly subscriptions, sometimes attached to hardware such as firewalls. The leaders increasingly offer integrated platforms rather than single products. Palo Alto Networks spans network security, cloud security and security operations. CrowdStrike delivers a growing range of protection modules through a single lightweight software agent on each device.
Where the moats are
Switching costs appear in 18 of the 19 moat-rated companies: security tools are wired deep into an organization's systems, and ripping one out creates risk that security teams would rather avoid. Network effects appear in four, where threat data gathered across many customers improves detection for all of them.
- Palo Alto Networks: the largest pure-play security company, combining firewalls, cloud security and security operations into one platform.
- CrowdStrike: cloud-delivered endpoint protection whose single agent makes adding new modules easy and replacing the platform hard.
The narrow-moat group includes Fortinet, Check Point, Zscaler, Cloudflare, Okta, Akamai, SentinelOne, SailPoint and Rubrik. Companies without a moat include BlackBerry, Radware and smaller specialists.
What wears moats down
Customers are consolidating onto fewer vendors, which squeezes companies built around a single point product. A high-profile failure can damage trust quickly in a business built on reliability, new kinds of attacks demand constant product investment, and competition keeps pricing under pressure.
What the quality scores say
Palo Alto Networks scores 57 and CrowdStrike 58 on MoatScope's quality scale. Fortinet, rated narrow, scores 77, higher than either wide-moat leader, reflecting years of profitable growth. The industry averages 36, pulled down by companies still investing ahead of profits.
What to watch
- Platform consolidation and which vendors customers keep.
- Retention and expansion within existing customers.
- Profitability at the growth-stage vendors.
- Growth in identity and cloud security.
Moat ratings and quality scores on this page update as companies report. Price versus fair value for every company in the industry is in the screener.