Cybersecurity M&A: Why Small Deals Are the New Big Play

J.P. Morgan Equity Research Analyst Brian Essex on M&A, IPOs and Security Spending Michael Novinson (MichaelNovinson) • April 30, 2025

After a period of stagnation, the cybersecurity industry is witnessing a resurgence of deal-making, driven by a shift toward smaller, technology-focused tuck-in acquisitions rather than transformational deals. Companies such as Palo Alto Networks and CrowdStrike are leading the charge, redefining the industry by prioritizing innovation and adaptability in cloud-centric, software-driven enterprises.

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"Smaller tuck-in deals enable companies to adapt rapidly to market shifts, such as the move from hardware-based castle-and-moat architectures to cloud and AI-driven security," said Brian Essex, executive director of U.S. software equity research at J.P. Morgan.

"Cybersecurity firms are no longer just chasing growth. They're building sustainable businesses that Wall Street can trust. Now, companies are pursuing investments to scale and expand, so when they ...