Fortinet Completes Acquisition of Lacework

Rhea-AI Summary

Fortinet (NASDAQ: FTNT) has completed the acquisition of Lacework, a leading AI-driven cloud-native application protection platform (CNAPP), effective August 1, 2024. This strategic move enhances Fortinet's Security Fabric by integrating Lacework's cloud security solutions, creating a comprehensive full-stack AI-driven cloud security platform. The acquisition brings 225 patents and applications to Fortinet, increasing its global patent count to over 1,800. Lacework's technology has been recognized by industry analysts, including Gartner. The deal also adds experienced sales teams and engineers to Fortinet's workforce, strengthening its position in the cloud security market.

Positive

• Acquisition of Lacework enhances Fortinet's cloud security capabilities
• Addition of 225 patents and applications, bringing Fortinet's total to over 1,800
• Integration of Lacework's AI-driven platform with Fortinet Security Fabric
• Acquisition includes experienced sales team and talented engineers
• Lacework recognized as a representative vendor in Gartner's 2024 Market Guide for CNAPPs

Negative

• None.

Insights

Technology Analyst

Fortinet's acquisition of Lacework marks a significant move in the cybersecurity landscape, particularly in cloud security. This strategic acquisition brings several key advantages to Fortinet:

• Enhanced cloud security capabilities: Lacework's AI-driven cloud-native application protection platform (CNAPP) will complement Fortinet's existing Security Fabric, creating a more comprehensive security solution for hybrid environments.
• Intellectual property boost: The addition of Lacework's 225 patents and applications brings Fortinet's total to over 1,800, potentially positioning them as a leader in cybersecurity innovation.
• Talent acquisition: Fortinet gains Lacework's experienced sales team and engineering talent, which could accelerate product development and market penetration.

However, the success of this acquisition will depend on Fortinet's ability to integrate Lacework's technology and team effectively. The cybersecurity market is highly competitive and while this move strengthens Fortinet's position, it will need to execute flawlessly to maintain its edge.

For investors, this acquisition could signal potential growth in Fortinet's cloud security revenue stream, especially as more businesses migrate to cloud environments. The expanded patent portfolio may also provide a competitive advantage and potential licensing opportunities. However, the financial terms of the deal were not disclosed, making it difficult to assess the immediate impact on Fortinet's financials.

Financial Analyst

The acquisition of Lacework by Fortinet is a strategic move that could significantly impact Fortinet's market position and financial performance. Here are key financial considerations:

• Market expansion: By integrating Lacework's cloud-native platform, Fortinet can tap into the rapidly growing cloud security market, potentially increasing its total addressable market and revenue opportunities.
• R&D efficiency: The acquisition of Lacework's patent portfolio could reduce Fortinet's R&D costs in cloud security, potentially improving profit margins in the long term.
• Competitive positioning: This move could help Fortinet compete more effectively against pure-play cloud security providers and other large cybersecurity firms, potentially leading to market share gains.

However, investors should consider potential risks:

• Integration costs: The process of integrating Lacework's technology and team could lead to short-term expenses that may impact profitability.
• Valuation concerns: Without disclosed financial terms, it's challenging to assess whether Fortinet overpaid for Lacework, which could affect return on investment.

Overall, while the acquisition appears strategically sound, its financial impact will depend on successful integration and execution. Investors should watch for updates on integration progress and any changes in Fortinet's cloud security revenue in upcoming earnings reports.

Acquisition adds a leading AI-driven cloud-native application protection platform to the Fortinet Security Fabric

SUNNYVALE, Calif., Aug. 02, 2024 (GLOBE NEWSWIRE) --

News Summary
Fortinet® (NASDAQ: FTNT), the global cybersecurity leader driving the convergence of networking and security, today announced that it has completed the acquisition of Lacework, a cloud security and cloud-native application protection platform (CNAPP) trailblazer, effective August 1, 2024.

“The addition of Lacework aligns with Fortinet’s commitment to protect our customers with innovative solutions that provide consistent security across on-premises and cloud environments,” said Ken Xie, Founder, Chairman of the Board, and CEO at Fortinet. “Integrating Lacework’s organically developed cloud-native platform with the Fortinet Security Fabric will result in the most comprehensive, full-stack AI-driven cloud security platform available from a single vendor.”

Like Fortinet, Lacework is an innovation-first company that has invested significantly to build, from the ground up, an integrated cloud security solution that adds meaningful value to customers. Lacework has been recognized for its leading technology by industry analysts and was recently named a representative vendor in the 2024 Gartner Market Guide for Cloud-Native Application Protection Platforms.¹ In addition to advanced technology, Fortinet has gained a portfolio of 225 patents and applications, many related to cloud security and artificial intelligence, which reflects the innovation focus and will bring Fortinet’s global patent and application count to over 1,800, estimated to be more than the nearest three pure-play security vendors combined. This acquisition also brings an experienced sales team and a talented group of engineers whose expertise will be instrumental in delivering industry-leading solutions to Fortinet’s customers.

Additional Resources

• Learn more about this news and Lacework’s cloud-native platform in the Fortinet blog.

• Learn more about the state of cloud security in 2024 by reading Fortinet’s latest report.
• Visit fortinet.com/trust to learn more about Fortinet innovation, collaboration partners, product security processes, and enterprise-grade products.
• Learn more about FortiGuard Labs threat intelligence and research and Outbreak Alerts, which provide timely steps to mitigate breaking cybersecurity attacks.
• Read about how Fortinet customers are securing their organizations.
• Follow Fortinet on Twitter, LinkedIn, Facebook, and Instagram. Subscribe to Fortinet on our blog or YouTube.

GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, Magic Quadrant is a registered trademark of Gartner, Inc. and/or its affiliates and is used herein with permission. All rights reserved.

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

¹ Gartner Market Guide for Cloud-Native Application Protection Platforms, By Dale Koeppen, Charlie Winckless, Neil MacDonald, Esraa ElTahawy, 22 July 2024.

About Fortinet
Fortinet (NASDAQ: FTNT) is a driving force in the evolution of cybersecurity and the convergence of networking and security. Our mission is to secure people, devices, and data everywhere, and today we deliver cybersecurity everywhere you need it with the largest integrated portfolio of over 50 enterprise-grade products. Well over half a million customers trust Fortinet's solutions, which are among the most deployed, most patented, and most validated in the industry. The Fortinet Training Institute, one of the largest and broadest training programs in the industry, is dedicated to making cybersecurity training and new career opportunities available to everyone. Collaboration with esteemed organizations from both the public and private sectors, including CERTs, government entities, and academia, is a fundamental aspect of Fortinet’s commitment to enhance cyber resilience globally. FortiGuard Labs, Fortinet’s elite threat intelligence and research organization, develops and utilizes leading-edge machine learning and AI technologies to provide customers with timely and consistently top-rated protection and actionable threat intelligence. Learn more at https://www.fortinet.com, the Fortinet Blog, and FortiGuard Labs. 

FTNT-F
Copyright © 2024 Fortinet, Inc. All rights reserved. The symbols ® and ™ denote respectively federally registered trademarks and common law trademarks of Fortinet, Inc., its subsidiaries and affiliates. Fortinet’s trademarks include, but are not limited to, the following: Fortinet, the Fortinet logo, FortiGate, FortiOS, FortiGuard, FortiCare, FortiAnalyzer, FortiManager, FortiASIC, FortiClient, FortiCloud, FortiCore, FortiMail, FortiSandbox, FortiADC, FortiAI, FortiAP, FortiAppEngine, FortiAppMonitor, FortiAuthenticator, FortiBalancer, FortiBIOS, FortiBridge, FortiCache, FortiCall, FortiCam, FortiCamera, FortiCarrier, FortiCASB, FortiCenter, FortiCentral, FortiConnect, FortiController, FortiConverter, FortiCWP, FortiDB, FortiDDoS, FortiDeceptor, FortiDirector, FortiDNS, FortiEDR, FortiExplorer, FortiExtender, FortiFirewall, FortiFone, FortiGSLB, FortiHypervisor, FortiInsight, FortiIsolator, FortiLocator, FortiLog, FortiMeter, FortiMoM, FortiMonitor, FortiNAC, FortiPartner, FortiPenTest, FortiPhish, FortiPortal, FortiPresence , FortiProtect, FortiProxy, FortiRecorder, FortiReporter, FortiSASE, FortiScan, FortiSDNConnector, FortiSIEM, FortiSDWAN, FortiSMS, FortiSOAR, FortiSwitch, FortiTester, FortiToken, FortiTrust, FortiVoice, FortiVoIP, FortiWAN, FortiWeb, FortiWiFi, FortiWLC, FortiWLCOS and FortiWLM.

Other trademarks belong to their respective owners. Fortinet has not independently verified statements or certifications herein attributed to third parties and Fortinet does not independently endorse such statements. Notwithstanding anything to the contrary herein, nothing herein constitutes a warranty, guarantee, contract, binding specification or other binding commitment by Fortinet or any indication of intent related to a binding commitment, and performance and other specification information herein may be unique to certain environments. This news release contains forward-looking statements that involve uncertainties and assumptions, such as statements regarding the security platform, integration, and the team’s contribution, among others. Changes of circumstances, product release and integration delays and challenges, other execution challenges, and other risks as stated in our filings with the Securities and Exchange Commission, located at www.sec.gov, may cause results to differ materially from those expressed or implied in this press release. If the uncertainties materialize or the assumptions prove incorrect, results may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Fortinet assumes no obligation to update any forward-looking statements, and expressly disclaims any obligation to update these forward-looking statements.

Media Contact:	Investor Contact:	Analyst Contact:
Michelle Zimmermann Fortinet, Inc. 408-235-7700 pr@fortinet.com	Aaron Ovadia Fortinet, Inc. 408-235-7700 investors@fortinet.com	Brian Greenberg Fortinet, Inc. 408-235-7700 analystrelations@fortinet.com

FAQ

When did Fortinet complete the acquisition of Lacework?

Fortinet completed the acquisition of Lacework on August 1, 2024.

How many patents and applications did Fortinet gain from the Lacework acquisition?

Fortinet gained a portfolio of 225 patents and applications from the Lacework acquisition.

What is Lacework's main product offering that Fortinet acquired?

Lacework offers a leading AI-driven cloud-native application protection platform (CNAPP).

How does the Lacework acquisition align with Fortinet's strategy?

The acquisition aligns with Fortinet's commitment to provide consistent security across on-premises and cloud environments, enhancing its Security Fabric with cloud-native capabilities.

What recognition has Lacework received in the industry?

Lacework was recently named a representative vendor in the 2024 Gartner Market Guide for Cloud-Native Application Protection Platforms.