ForeScout IPO: 5 reasons this cybersecurity company will be successful

IoT security company ForeScout is going public today. Its products, its management and the growing IoT market put it in a prime position to succeed.

ForeScout IPO: 5 reasons this cybersecurity company will be successful
ForeScout Technologies, Inc. (CC BY 3.0)

Forescout, an Internet of Things (IoT) security company based in San Jose, California, is going public today. And the company's CEO, Mike DeCesare, speaking on CNBC's Squawk CEO Call this morning, said the company is aiming for a $1 billion valuation on the IPO.

Cybersecurity Ventures says the company's success is inevitable and gave five reasons why:

1. The wind is behind their back. Forescout will IPO with 2,500 customers globally and with strong brand recognition across Fortune 500, Global 2000, and mid-sized corporations in the U.S. and internationally.

2. Forescout has an extraordinary executive management team. DeCesare is much more than a startup CEO. Prior to ForeScout, he served as president of Intel Security and executive vice president of worldwide sales at McAfee. Dave DeWalt is vice chairman of the ForeScout board. He was previously chairman and CEO at FireEye when that company went public and then became one of the most successful modern day cybersecurity companies.

3. Cyber crime is predicted to cost the world $6 trillion annually by 2021, up from $3 trillion in 2021, according to the Official 2017 Annual Cybercrime Report from Cybersecurity Ventures. One of the main drivers is a massive expansion of the cyber attack surface. IoT devices in particular are a major contributor. IoT security is one of ForeScout's sweet spots.

4. Global spending on cybersecurity products and services is predicted to exceed $1 trillion cumulatively over the next five years, from 2017 to 2021. The cyber crime epidemic has led CEOs, CIOs and CISOs to increase their cyber defense budgets. Cybersecurity Ventures expects the cybersecurity market to grow 12 to 15 percent year over year through 2021. ForeScout's IPO comes during an uptick in cyber spending.

5. CISOs and IT security leaders want and need unicorns in the cybersecurity space, and there aren't many. There are only 15 pure-play cyber firms with market caps exceeding $1 billion. The unicorns will consolidate the market and offer customers enterprise solutions, which will reduce the number of point products in use at organizations. This has been the Achilles' heel for cyber protecting large enterprise networks. There's not enough labor for security teams to effectively use products from so many vendors, which has led to a lot of unnecessary data breaches.

In the cybersecurity market, a vendor either sells what is has or they have what sells. Most security vendors use sophisticated value propositions to help potential customers understand why they should buy. ForeScout seemingly has what sells. That should mean more invitations to seven-figure discussions and shorter sales cycles.

Will ForeScout reach a $1 billion valuation? Follow the new symbol Nasdaq: FSCT to find out.

Visit SteveOnCyber.com to read all of my blogs and articles covering cybersecurity.

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