Palo Alto Networks, the network security company best known for its Next Generation Firewalls, on Monday will announce that VeriSign CEO, Mark D. McLaughlin, will join Palo Alto Networks and take the reigns as president and CEO of the company. The fast growing company had been without a CEO for 8 months.
McLaughlin announced his resignation as President and Chief Executive Officer and member of the Board of Directors at VeriSign on July 25th, but will remain with the company until August 25th, after which he will join Palo Alto Networks. McLaughlin will also join the company's Board of Directors.
McLaughlin had two stints with VeriSign, first from 2000 to 2007 when he held various positions including Executive Vice President of Products and Marketing before resigning in December 2007. McLaughlin returned to VeriSign in January 2009 and served as President and Chief Operating Officer from January 2009 to August 2009, when he was appointed President and Chief Executive, a position he has held since. At VeriSign McLaughlin had a base salary of $752,885, and combined with stock awards, options and other incentives, totaled $4,546,800 in compensation for 2010.
"We are thrilled that Mark is joining Palo Alto Networks. His proven executive leadership experience, customer focus, and passion for innovation will help us take the company to the next level," said Nir Zuk, founder and CTO of Palo Alto Networks.
Palo Alto Networks has raised $64 Million in funding to date, with the most recent round taking place in 2008. The company has been cashflow positive from operations for five consecutive quarters, and has achieved a bookings run above the US$200 million mark that it had previously stated as a target. The company recently moved into a larger headquarters in Santa Clara to accommodate its growth, with 300 planned openings in its new fiscal year, after already doubling its employee count during its most recent fiscal year ended July 31.
The company is considered as a top candidate for an initial public offering, which could come sooner than later given the current hot IPO market. That being said, the company will likely give McLaughlin some time to settle in his new role before doing so, and being cashflow positive, the company likely isn’t a rush. Based on current metrics and rate of growth, the company could easy raise another round of funding at an extremely attractive valuation.
Despite its continued success and rapid growth, the company has been somewhat challenged in the CEO role, with McLaughlin being the third CEO in six years, and the top spot being vacant for the past 8 months. Previous CEO, Lane Bess, resigned from the company in December 2010 due to differences in leadership philosophy. Bess served as CEO from July 2008 until December 2010, and took the role of COO at ZScaler in May 2011. Previous to Bess, David Stevens served as CEO, from October 2005 through June 2008. Stevens is currently serving as CTO at Broadcade.
In April 2010, Palo Alto Networks hired former Sun Microsystems CFO, Michael E. Lehman, as chief financial officer.
The company, which prides itself on having 100% of its design and manufacturing taking place on United States soil, has only been selling a product since August 2008, but now claims over 4,500 customers. In its most recent fiscal year, its business was approximately 60% domestic and 40% international, the company said.
A departure of well-compensated McLaughlin from an established and well performing publicly traded company is a strong vote of confidence for the network security company. "I'm very excited to join Palo Alto Networks. The company's disruptive technology, proven market success and strong momentum make this a unique opportunity to lead the company with its continued, explosive growth in a multi-billion dollar market," McLaughlin said.