|Traded as||NASDAQ: FTNT|
S&P 500 Component
|Industry||Network security and computer security|
|Founder||Ken Xie and Michael Xie|
|Headquarters||Sunnyvale, California, U.S.|
|Products||Fortinet Security Fabric|
|Services||next generation firewalls|
Security information and event management
|Revenue||US $1,494.93 million (2017)|
|US $109.804 million (2017)|
|US $31.399 million (2017)|
|Total assets||US $2,257.916 million (2017)|
|Total equity||US $589.377 million (2017)|
Number of employees
Fortinet is an American multinational corporation headquartered in Sunnyvale, California. It develops and markets cybersecurity software, appliances and services, such as firewalls, anti-virus, intrusion prevention and endpoint security. It is the fourth-largest network security company by revenue.
Fortinet was founded in 2000 by brothers Ken and Michael Xie. It raised about $93 million in funding by 2004 and introduced ten FortiGate appliances. That same year was the beginning of a recurring patent dispute between Fortinet and Trend Micro. The company went public in November 2009, raising $156 million through an initial public offering. Throughout the 2000s, Fortinet diversified its product lines, adding products for wireless access points, sandboxing, and messaging security, among others.
Prior to Fortinet, Ken Xie founded and served as an executive for NetScreen, and Michael Xie served as an executive for ServeGate. In 2000, they co-founded Appligation Inc. The company was renamed to ApSecure in December 2000 and later renamed again to Fortinet, based on the phrase "Fortified Networks." In 2004, amid fundraising for Fortinet, NetScreen was acquired by Juniper Networks for $4 billion.
Fortinet spent two years in research and development, before introducing its first product in 2002. The company raised $13 million in private funding from 2000 to early 2003. An additional $30 million in financing was raised in August 2003, followed by $50 million in March 2004. Fortinet's first channel program was established in October 2003. The company began distributing its products in Canada in December 2003, through Westcon Canada, and in the UK in February 2004 through Norwood Adam. By 2004 Fortinet had offices in Asia, Europe and North America.
A German Linux programmer from gpl-violations.org obtained a preliminary injunction against Fortinet's UK subsidiary in April 2005, due to allegations that the company was using encryption to hide its use of Linux kernels that are subject to the GNU General Public License (GPL). The license's terms require disclosure of the source code. The following month Fortinet agreed to make its source code for GPL-licensed elements available upon request, modified its licensing terms and made other changes, ending the dispute.
Growth and expansion
Fortinet became profitable in the third quarter of 2008. Late that year 2008, Fortinet acquired the database security and auditing intellectual property of IPLocks, and extended job offers to the company's 28 employees. In August 2009, it acquired the intellectual property and other assets of Woven Systems, an ethernet switching company. According to market research firm IDC, by November 2009 it held over 15 percent of the unified threat management market. Also in 2009, CRN Magazine's survey-based annual report card (ARC) placed Fortinet first in network security hardware.
In November 2009, Fortinet had an initial public offering. It was planning to raise $52.4 million through the sale of 5.8 million shares. Many stockholders also sold their shares simultaneously. Just before the first day of trading, Fortinet increased the share price from $9 to $12.50 and the price increased in the market to $16.62 by the end of the first day of trading, raising $156 million in financing.
By 2010, Fortinet had $324 million in annual revenues. That November, Bloomberg covered rumors that IBM was considering acquiring the company, which Fortinet denied. In December 2012, Fortinet acquired XDN (formerly known as 3Crowd), which provided an app-hosting service called CrowdDirector. The following year, in 2013, Fortinet acquired application delivery company Coyote Point for an undisclosed sum.
In July 2013, Fortinet made changes to its reseller program, Security Operations Center "SOC" in a Box, in order to provide monthly financing options for managed security service vendors with less experience and less capital. The program had previously been reorganized in 2006 for enterprise companies. In December 2013, Fortinet sued Sophos under allegations that it was poaching Fortinet employees and infringing on Fortinet patents. The legal dispute was settled two years later in mediation with non-disclosed terms.
In May 2015, Fortinet acquired the Silicon Valley-based Wi-Fi hardware company, Meru Networks, for $44 million. In late 2015, Fortinet security researchers demonstrated a Fitbit hack that gained access through Bluetooth, then allowed the hacker into synchronized devices. The following year, the company acquired an IT security, monitoring and analytics software vendor, AccelOps for about $28 million.
Fortinet runs the Network Security Academy, which was founded in early 2016. It provides resources to universities teaching IT security classes.
Products and Research
Fortinet released its first product, FortiGate, a firewall, in 2002, followed by anti-spam and anti-virus software. According to ZDNet, the company was best known for its Security Information and Event Management (SIEM) products, products which analyze hardware and software security alerts. AccelOps product was renamed as FortiSIEM  Fortinet has four research and development centers in Asia, as well as others in the US, Canada and France. It also hosts a certification and training program with eight levels of NSE certification.
In May 2004, Trend Micro filed a legal complaint against Fortinet alleging that its antivirus technology infringed Trend Micro's patents on methods for scanning email and internet traffic. That August the International Trade Commission ruled against Fortinet, prohibiting the sale of affected products. Fortinet said Trend Micro's patents were too broad, but it complied with the ruling. Fortinet and Trend Micro reached an agreement with undisclosed terms in January 2006 and Fortinet modified its antivirus products to avoid Trend Micro's patents. A few years later, an attorney from the International Trade Commission filed an opinion for another case that said he felt the related patents from Trend Micro were invalid. Fortinet made a new legal filing and in December 2010, the US Patent and Trademark Office declared the patents as invalid.
In 2005, Fortinet founded the FortiGuard Labs internal security research team. That same year, a study by OpenNet found that Fortinet's appliances were being used for internet censorship in Myanmar. Fortinet said its products were sold by third party resellers and it respects US embargoes, however photographs were found of a Fortinet salesperson with Burma's Prime Minister. In 2008, Fortinet researchers said a Facebook widget from Zango had tricked more than three million users into downloading malicious spyware under the guise of telling users their secret crush. Zango denied the allegations, saying their software was opt-in.
The company founded the Cyber Threat Alliance with Palo Alto Networks in 2014, in order to share security threat data across vendors. It was joined by McAfee and Symantec later that year. In 2017, Fortinet created a standalone subsidiary, Fortinet Federal, focused on cybersecurity products for government agencies. Former National Security Agency director Mike McConnell is on Fortinet Federal’s board, and 12 of the 15 U.S. Cabinet departments use Fortinet products. That same year, Fortinet researchers discovered a spyware that scams victims by impersonating the IRS and MacRansom, a ransomware program specifically targeting Mac computers.
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