PANWPalo Alto Networks, Inc.

Palo Alto Networks began with network firewalls and now sells security as whole platforms.

The historical product is the next-generation firewall, hardware at the network edge. That business is mature and cyclical: bought as projects, refreshed by generation. Growth in recent years comes from two other platforms — cloud security and response automation — both sold by subscription.

The strategy is called consolidation: instead of a dozen products from different vendors, the customer is offered one suite from one supplier, sometimes discounted during the transition. That weighs on near-term revenue but lengthens contracts and raises switching costs.

The metric investors watch is annual recurring revenue, because it grows faster than total revenue and better reflects the point of the rebuild. The risks are familiar: competition from Microsoft and from specialist vendors, and sensitivity to large customers' budgets. No dividend is paid.