Fortinet Surging Into 2016… and it Appears to be Microsoft Driven

The 2016 Technology Spending Intentions Survey is not yet complete (N=571), but there are some very interesting and contrarian themes emerging. One of the most evident is for the recently unloved InfoSec vendor Fortinet. Not only is the data accelerating sequentially versus the poor 2H15 data we captured, but its doing so by swimming upstream to larger organizations and it appears to be driven by those adopting and increasing spend on Microsoft in 2016 — most noticeably among those spending on Azure. We find this quite interesting given the collaboration announcements made in mid-2015 (Microsoft — Fortinet solutions brief here) and we have included some end user commentary regarding Microsoft + Fortinet below. Please bear in mind our 2H15 data for Fortinet collected in July and September 2015 was not positive and the acceleration and correlations we’re capturing are forward-looking and regard 2016. We feel viewing the slide deck in this instance is a must — some of which is provided below. Please Click Here to Download the ETR JAN16 Fortinet PDF

[1] On a year-over-year basis, 2016 Net spending intentions for Fortinet are up 76% versus April 2015 and 329% versus April 2014. On a sequential basis, 2016 Net spending intentions for Fortinet are up 67% versus October 2015. Therefore, the acceleration we’re capturing is purely forward-looking (2016) and is a very recent inflection and change.

[2] Relative to the Information Security sector, Fortinet has become one of the largest outperformers in the 49-vendor sector. By comparison, it was simply average at this time last year versus its peers and below average two years ago. Our 2H15 data for Fortinet, collected in June/July and September, was poor and below average, which revealed itself in late October 2015. 2016 Net spending intentions for Fortinet are among the best on a relative basis versus its sector peers, both a year-over-year perspective and from a more recent and sequential perspective.

[3] The 2016 data for Fortinet is accelerating most notably among Large Organizations (>1,200 employees). Net spending intentions were at 0% for Fortinet from Large Organization respondents just two years ago, but now stand at 68% for 2016. This is actually the 2nd best 2016 Net spending intentions score in the Information Security sector among vendors with ≥ 30 Large Organization citations. Again this is recent, as this was not the case as recently as October 2015.

[4] From a geographic perspective, Fortinet is improving across the board in 2016 versus 2015 (North America, EMEA and APAC).

[5] 2016 spending intentions for Fortinet from several very large respondent cuts (S&P500, ETR BIG65, Global1000 and Large) are improving significantly versus2H15 and 2015. However, while Fortinet swims upstream it appears it is not gaining favor with its core MSE/SMB customers — a common occurrence among vendors that have historically swam upstream successfully.

[6] From an Industry vertical perspective, Fortinet’s 2016 spending intentions are accelerating nicely among meaningful verticals such as Financials/Insurance, IT/TelCo and Retail/Consumer. While Top Tier TelCo is decelerating from a sequential basis versus last October, that data — which upticked versus July — has yet to be confirmed or refuted (next report). It’s worth noting, that no Top Tier TelCo respondents have indicated they intend to replace Fortinet in 2016. Top Tier TelCo represents ~19% of Fortinet’s annual revenues.

[7] Why is Fortinet accelerating in 2016? It appears to be Microsoft driven. Based on shared accounts with those Adopting or Increasing on Fortinet in 2016 (N=35), Microsoft appears 7 times among the Best 20 vendor-sector combinations out of a total universe of 515. This is even more evident among Large Organizations. Fortinet Large Organization Adopting or Increasing N=29).

[8] Fortinet has the #1 Best 2016 Net spending intentions score in the InfoSec sector among shared accounts with those Adopting or Increasing on Microsoft in 2016 across 6 of its most significant product categories (Fortinet 2016 Net score=69%, N=32 // Microsoft 6-sector Adopting or Increasing N=250). Note that this trend with Microsoft is forward-looking, recent and yet to emerge, as it was not the case in October 2015.

[9] It may be most noticeable among those Adopting or Increasing on Azure in 2016. Again, Fortinet has the top score among InfoSec vendors with >4 shared accounts. And again, among just Azure, this trend is forward-looking, recent and yet to emerge. The trend with Azure improves when we isolate to just Large Organizations. The time-series trend with Azure among only Large Organizations is even more pronounced.

Large Latin American Government:
In our organization it’s a collateral correlation, because we took two separate decisions:
 To adopt Microsoft Office 365 early last year, with the target of implementing Microsoft Dynamics CRM (in a cloud basis, already done).
 To adopt a new and stronger Firewall solution based on appliance, which in our case was Fortinet 200D due to it’s multiple security add-ons, and full integration with Active Directory, which implementation took place late last year.

I think that the easy of integration between Fortinet and Microsoft “world” made a good synergy turning the balance to purchase Fortinet.
In this government users scenario (1500 internal end users, 150 sites, 100 servers), it’s really important to move to a single sign-on solution, such as Active Directory.

All the best,

Thomas DelVecchio
Director, Enterprise Technology Research (ETR

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