Tied to Fortinet's Q3 2023 earnings, the company unveiled that strategic investments in research and development (R&D) and go-to-market (GTM) will be centered around three markets: secure networking, Universal SASE, and security operations. We spoke with Ken Xie, Founder, Chairman of the Board, and CEO of Fortinet, on how this evolution underscores and reaffirms the company's commitment to providing value to its customers and fostering a culture of innovation.

Can you give us an overview of the three focus areas and why now?

Ken Xie:Pivoting ahead of market changes enables us to remain at the forefront of shifting macroeconomic, industry, and customer trends. Two decades ago, we identified the convergence of networking and security as a long-term trend, which led to our differentiated advantage of proprietary ASICs for better performance, low cost, and reduced energy consumption to enable us to deliver more use cases beyond traditional enterprise network security. For example, our latest FortiASIC Security Processing Unit, SP5, delivers an average of 17x faster firewall performance, 32x faster encryption, and 88% less power consumption than standard CPUs and accelerates 14 converged networking and security functions. We also saw that organizations were going to need to consolidate their security solutions into an integrated platform, and we developed our Fortinet Security Fabric to address that challenge. And we are still the only vendor that provides either of these capabilities.

Our sharpened focus around three markets-secure networking, Universal SASE, and security operations-is critical to the next stage of digital transformation. Universal SASE and security operations, in particular, are fast-growing markets that we believe offer huge opportunities for growth while meeting the evolving needs of our customers. These three markets also play to our strengths, leveraging our focus on innovation and proven leadership in the critical areas of security, where we have been a leader for 23 years. Targeting these areas now will position us to best support our customers as their businesses continue to evolve.

What business growth opportunities does Fortinet see in these areas?

Ken Xie:Secure networking remains a vital part of our strategy and a market that we believe will return to double-digit annual growth over time. The secure networking market is valued at$62 billion and is projected to increase high single digits annually to$86 billion by 2027. Our consistent focus on innovating our industry-leading FortiOS operating system, which supports over 30 networking and security applications, combined with our ASIC-driven performance capabilities, which provide 5x to 10x better performance on average than competitors, continues to drive our market share gains for secure networking.

Security operations, also known as SecOps, is a$46 billion market with an annual growth rate in the mid-teens. It is expected to grow to$78 billion by 2027. Our comprehensive SecOps platform offers EDR, SIEM, SOAR, NDR, and other solutions as a fully integrated package. It provides customers with the most deeply comprehensive and integrated SecOps offering in the industry. We are the only vendor to provide seamless integration of the underlying security tools needed to keep up with the demands of today's security operations, enabling the powerful automation SecOps teams need to detect, analyze, and respond to today's threats. And because our advanced AI is integrated across the entire SecOps portfolio, including our consolidated management and analytics systems, organizations are able to receive automatic threat detection and response within seconds of a cyber incident.

We are also increasing our focus on SASE-a$17 billion market expected to grow at a 20% compound annual growth rate to$36 billion by 2027. We believe Fortinet is the only company with a SASE service solution positioned to address all use cases today's organizations experience. Converging networking, connectivity, and security systems through a single operating system, both in the cloud or as an appliance, ensures that the full networking and security stack, including our market-leading secure SD-WAN solution, can provide zero-trust access and control to any user on any device from any location, all managed through a single management console.

What investments is Fortinet making in these focus areas to sustain business growth?

Ken Xie:Growth in the SASE and SecOps markets will be the result of the tactical investments we have been making in innovation and performance. In addition to the recent announcement of our Google Cloud partnership and our own data center investments, Fortinet is: 

• Continuing to integrate single-vendor SASE features into FortiOS, including zero-trust network access, CASB, DLP, and other enterprise features. Fortinet has already been recognized in the first Gartner? Magic Quadrant?for Single-Vendor SASE, which, to us, exemplifies the strength of our solution.
• Continuing to expand our SecOps capabilities with the industry's most advanced AI technology, new functions that leverage our deep integration between solutions, and enhanced visibility and control made possible through our unified management.
• Finalizing co-development agreements with existing large enterprise customers to accelerate the improvement of our integrated enterprise-grade SASE solution, providing seamless, end-to-end control across all users, devices, and applications across all use cases.

How do these sharpened focus areas align with the vision you had for Fortinet when you first started the company 20+ years ago?

Ken Xie:Throughout our over 20-year history, Fortinet's constant commitment to remaining at the forefront of innovation has been a driving force for customers to secure their organizations. Throughout this time, our founding principles of converging networking and security and consolidating point products into an integrated platform continue to reverberate across today's cybersecurity market. Looking forward and based on our long history of continual company evolution rooted in innovation, we are confident that this is the right time to focus our operations around secure networking, Universal SASE, and security operations.