@scuttleblurb said below in chat w/ @LibertyRPF - I come back to it often (as a bull on ZT security vendors). While secular trend is obvious & cloud native cos have great unit economics, I worry investors overweight network effects. Am I wrong to worry? $OKTA $CRWD $ZS

I pitched $OKTA to a respected $1bn+ HF PM few yrs ago. He worried re: $MSFT Azure AD competition. I thought "Switzerland" + Okta Integration Network would let $OKTA win. The stock now reflects this though I think still early in replication runway & compounding FCF/sh.

Mkt caps today on cloud-first security cos are huge (probably correctly but time will tell). Even $PANW has acquired its way into SASE etc & is now at $35bn. I think safe to say network effects for ZT vendors have become more understood.

High level thesis for all these cos is similar - once absolute customer growth slows then large cust growth matters more, then that slows & module upsell/effective ARPU growth matters more & is high incremental mgn on installed base + FCF accretive.

Right now mkt is assuming multiple winners in different verticals. Historically security has been brutally competitive - much mkt cap has been gained & lost. Do we finally see large scale consolidation or are standalone network effects/upsell enough to drive these models fwd?

I'm not selling my $OKTA position bc I believe in Todd, Freddie & co to continue executing. But I believe it's important to constantly question your assumptions/beliefs. I see a lot of catch-all "network effects" jargon these days to explain many things. Has never been that easy.