SC

Strategy Canon

Fortinet: sourced choices

49 product and go-to-market choices, oldest first. Back to the case study

  1. 1993Product · Prior product Ken Xie's first company, Stanford InfoSystem, set up software firewalls for customers connecting to the Internet; he concluded that a firewall running on a PC operating system was not reliable enough. FT2
  2. 1997Product · Prior product At NetScreen, co-founded by Ken Xie in 1997, firewall and VPN functions ran on custom ASICs in a dedicated appliance; NetScreen built the first gigabit-speed firewall. FT14
  3. 2000-10Product · Initial job Ken and Michael Xie founded the company with about a dozen engineers to build integrated network and content security that would not cripple network performance. FT4
  4. 2002Go_To_Market · Geography Fortinet launched its first product in the Americas, Europe and Asia at the same time rather than in the US first. FT2
  5. 2002-05Product · Launch The first FortiGate appliance shipped in May 2002. FT4
  6. 2002-08Product · Certification ICSA Labs certified FortiGate gateway antivirus, the first ASIC-based gateway to earn it; Fortinet called itself the only provider of ASIC-powered network antivirus. FT29
  7. 2002-10Product · Architecture The FortiGate-3000 (about $20,000) used the FortiASIC chip for virus scanning, intrusion detection and encryption alongside two CPUs. FT30
  8. 2003Go_To_Market · Distribution Exclusive Networks began distributing FortiGate in France and served as sole distributor for many years. FT36
  9. 2003-02Go_To_Market · Distribution Fortinet opened a German office and signed distributor eSeSIX, adding to existing UK and France offices. FT39
  10. 2003-02Go_To_Market · Carrier customer KDDI selected FortiGate for its managed antivirus gateway service across its DSL customers, citing antivirus performance comparable to the line speed. FT38
  11. 2003-06Go_To_Market · Competitive pricing FortiGate prices ran from about 500 pounds (FG50) to about 6,000 pounds (FG400); firmware upgrades came free with maintenance. FT33
  12. 2003-10Go_To_Market · Channel program Fortinet launched its first channel partner program in October 2003, followed by Canadian distribution (December 2003) and UK operations (February 2004). FTX1
  13. 2004-10Go_To_Market · Licensing Fortinet licensed all security functions per appliance instead of per user. FT40
  14. 2006-08Go_To_Market · Category position IDC analyst Charles Kolodgy placed Fortinet first at the high end of the UTM category and SonicWall first at the low end; only Fortinet and ISS had NSS Group's UTM approval. FT37
  15. 2007-11Product · Independent test In a Network World lab test the FortiGate-3610A reached 524 Mbps with antivirus on; no other gigabit UTM firewall passed 300 Mbps. FT31
  16. 2009-06-28Go_To_Market · Channel Substantially all revenue came through distributors and resellers; by June 2009 the company had shipped over 450,000 appliances to more than 5,000 channel partners and 75,000 end customers. FT1
  17. 2009-08Product · Architecture FortiASIC chips accelerated compute-intensive security tasks and FortiOS, the company's own operating system, was the foundation for all security functions. FT1
  18. 2009-08Product · Product range The FortiGate line ran from the FortiGate-50 for small businesses and branch offices to the FortiGate-5000 chassis for large enterprises and carriers. FT1
  19. 2009-08Product · Bundled functions One FortiGate combined firewall, VPN, gateway antivirus, intrusion prevention, web filtering and antispam, replacing separate point products. FT1
  20. 2009-08Product · Threat research FortiGuard subscriptions delivered antivirus, intrusion prevention, web filtering and antispam updates from the company's own FortiGuard threat research team. FT1
  21. 2009-08Product · Adjacent products The company also sold FortiManager (central management), FortiAnalyzer (logging and analysis), FortiMail, FortiClient and FortiWiFi. FT1
  22. 2009-08Product · Manufacturing The ASICs were fabricated by contract manufacturers (Faraday on UMC foundries, K-Micro on TSMC) and appliances were built by contract and original design manufacturers. FT1
  23. 2009-08Go_To_Market · Channel terms Channel partners generally had no minimum purchase requirements, and major distributors received price protection. FT1
  24. 2009-08Go_To_Market · Sales force Fortinet's sales representatives worked with distributors and resellers on sales to larger end customers rather than selling around them. FT1
  25. 2009-08Go_To_Market · Recurring services FortiGuard subscriptions and FortiCare support grew from 32% of revenue in 2006 to 56% in the first half of 2009. FT1
  26. 2009-08Go_To_Market · Geography In the first half of 2009, 36% of revenue came from the Americas, 38% from EMEA and 26% from Asia Pacific. FT1
  27. 2009-08Go_To_Market · Positioning Fortinet positioned FortiGate against stacks of standalone gateway antivirus, firewall, intrusion prevention and web filtering devices, citing their complexity and total cost of ownership. FT1
  28. 2009-08Go_To_Market · Category Fortinet cited IDC as ranking it the leading UTM appliance vendor with 13.9% share in the first quarter of 2009. FT1
  29. 2009-08Go_To_Market · Target segments The IPO strategy named increasing sales to large enterprise, service provider and government customers as a goal. FT1
  30. 2009-11Go_To_Market · IPO Fortinet listed on Nasdaq in November 2009, raising about $156 million. FTX1
  31. 2010-04Product · Architecture (founder summary) In 2010 Ken Xie described the FortiGate design as custom ASICs accelerating the network layer and a general-purpose x86 processor handling content; 2002 to 2003 sources describe the FortiASIC running virus scanning itself. FT2
  32. 2015Go_To_Market · Enterprise push In 2015 Fortinet invested in sales and marketing to win share in the enterprise market, citing enterprise customers' higher lifetime value. FT7
  33. 2015Go_To_Market · Distributor concentration Exclusive Networks Group accounted for 12%, 15% and 18% of revenue in 2013, 2014 and 2015. FT7
  34. 2016-02Product · Chip families FortiASIC had three processor lines: a content processor, a network processor and a system-on-a-chip for smaller appliances. FT7
  35. 2016-04-25Product · Security Fabric The Security Fabric linked FortiGate, other Fortinet products and third-party tools through FortiOS and open APIs, sharing threat intelligence through FortiGuard Labs. FT8
  36. 2018-10-24Product · SD-WAN SD-WAN was built into FortiOS on every FortiGate with no separate licence, so about three million installed devices could gain it by software update. FT11
  37. 2018-10-24Go_To_Market · SD-WAN pricing Fortinet included SD-WAN in FortiGate at no extra licence cost. FT11
  38. 2019-10-31Go_To_Market · SD-WAN deals Fortinet reported eight deals over $1 million involving secure SD-WAN in Q3 2019 against one a year earlier, and 11% SD-WAN market share. FT10
  39. 2022-03-30Go_To_Market · Unit share Fortinet, reporting IDC's tracker, put its 2021 share of firewall, UTM and VPN appliance units at 36.8% and said it had shipped the most security appliances for nine consecutive years. FT35
  40. 2023-02-09Go_To_Market · Supply purchasing Fortinet's CMO said the company forward-orders chips in the millions rather than tens of thousands, gaining price leverage. FT3
  41. 2023-02-14Product · ASIC generation The FortiSP5 security processor launched with a claimed 17 to 32 times the throughput of similarly priced competitor models on general-purpose CPUs. FT16
  42. 2023-05-22Product · Unified SASE Fortinet's Universal SASE ran on the same operating system as its firewalls for consistent policy and central management. FT23
  43. 2024Product · Acquisitions Fortinet acquired Lacework (cloud security) and Next DLP (data protection). FT18
  44. 2024Go_To_Market · Training The Fortinet Training Institute had issued over one million certifications. FT18
  45. 2024-12-31Go_To_Market · Enterprise reach About 80% of the Fortune 100 and 72% of the Global 2000 were Fortinet customers. FT18
  46. 2025-06-10Go_To_Market · Branch revenue Dell'Oro counted Fortinet's branch revenue (access routers, SD-WAN, low-end firewalls) rising from $345 million to $919 million between 2019 and 2024. FT41
  47. 2025-12-31Go_To_Market · Distribution Fortinet sold through a two-tier model with distributors including Arrow, Exclusive, Ingram Micro and TD Synnex; six distributors held 67% of net receivables. FT6
  48. 2026-02-25Product · R&D location Research and development was conducted primarily in the United States and Canada, with no source code development in Russia or China. FT6
  49. 2026-10-01Go_To_Market · Competitive pricing Fortinet's comparison page against Palo Alto Networks offers all-inclusive bundles and quotes a customer saying FortiGate hardware was 40% cheaper than its legacy firewalls. FT28