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Fortinet

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Fortinet, Inc.
Public
Traded as NASDAQFTNT
S&P 400 Component
Industry Network security and computer security
Founded 2000
Founder CEO: Ken Xie
CTO: Michael Xie
Headquarters Sunnyvale, California, United States of America
Products Fortinet Security Fabric;[1] FortiGate UTM, firewalls, next generation firewalls, antivirus programs, intrusion-prevention systems, antispyware, antispam, VPN, wireless security, application control, web filtering
Revenue US $1.28 billion (2016)[2]
US $42.9 million (2016)[2]
US $32.2 million (2016)[2]
Total assets US $2.14 billion (2016)[2]
Total equity US $837.68 million (2016)[2]
Number of employees
4,665[2]
Website www.fortinet.com

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, among others. 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 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.

Corporate history[edit]

Early history[edit]

Fortinet was founded in Sunnyvale, California in 2000 by brothers Ken and Michael Xie.[3] The founders had previously served in executive positions at NetScreen and ServGate respectively.[4] The company was initially named Appligation Inc., then renamed to Appsecure in December 2000 and later renamed to Fortinet, based on the phrase "Fortified Networks."[4] It spent two years in research and development,[5] before introducing its first product in 2002.[3]

Fortinet raised $13 million in private funding from 2000 to early 2003.[3] An additional $30 million in financing was raised in August 2003, followed by $50 million in March 2004, reaching a total of $93 million in funding.[6] According to Fortinet, its revenues grew ten-fold from 2002 to 2003.[7] Its first channel program was established in October 2003.[8] Westcon Canada started distributing FortiGate products in Canada in December 2003, which was followed by Norwood Adam in the UK in February 2004.[3] The reseller program was re-organized in January 2006 and named "SOC in a BOX".[3] By 2004 Fortinet had offices in Asia, Europe and North America.[5]

In October 2005, a study by OpenNet found that Fortinet's appliances were being used for internet censorship in Myanmar. Fortinet said its products are sold by third party resellers and it respects US embargoes, however photographs were found of a Fortinet salesperson with Burma's Prime Minister.[9][10]

Legal disputes[edit]

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.[11][12] 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.[13]

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.[14] 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.[15] 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.[16][17]

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.[3][18]

In December 2013 Fortinet sued Sophos under allegations that it was poaching Fortinet employees and infringing on Fortinet patents.[19][20] The legal dispute was settled two years later in mediation with non-disclosed terms.[21]

Further development[edit]

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.[22] Zango denied the allegations, saying their software was opt-in.[23]

In late 2008, Fortinet acquired the database security and auditing intellectual property of IPLocks, and extended job offers to the company's 28 employees.[24] It acquired the intellectual property and other assets of Woven Systems, an ethernet switching company, in August 2009.[25] According to IDC, by this time it was the largest unified threat management vendor, with a 15.4 percent market-share.[26] The company had been growing steadily and became profitable after losing money from 2004 - 2007.[27] Fortinet was also rising in CRN Magazine's survey-based annual report card (ARC), reaching first place in 2009.[28]

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.[26] Many stockholders also sold their shares simultaneously.[29] 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.[30]

Recent history[edit]

By 2010, Fortinet had $324 million in annual revenues.[3] That November, Bloomberg covered rumors that IBM was considering acquiring the company,[31] which Fortinet denied.[32][33] In December 2012, Fortinet acquired XDN (formerly known as 3Crowd), which provided an app-hosting service called CrowdDirector.[34] In 2013 Fortinet acquired application delivery company Coyote Point for an undisclosed sum.[35][36]

Fortinet made changes to its reseller program in July 2013, in order to provide financing and other options for small managed security service vendors.[37] Recently some resellers have complained that Fortinet is competing with its own resellers, whereas Fortinet says it does not do any direct sales.[38]

Fortinet 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.[39][40] In May 2015, Fortinet acquired the Silicon Valley-based Wi-Fi hardware company, Meru Networks, for $44 million.[41][42] In late 2015, Fortinet security researchers demonstrated a Fitbit hack that gained access through Bluetooth, then allowed the hacker into synchronized devices.[43][44]

In June 2016, Fortinet acquired an IT security, monitoring and analytics software vendor, AccelOps for about $28 million.[45] 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.[46]

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,[47] and 12 of the 15 U.S. Cabinet departments use Fortinet products.[48] That same year, Fortinet researchers discovered a spyware that scams victims by impersonating the IRS[49] and MacRansom, a ransomware program specifically targeting Mac computers.[50][51]

Operations[edit]

Fortinet also runs the FortiGuard Labs internal security research team, which was founded in 2005.[52] It has four research and development centers in Asia, as well as others in the US, Canada and France.[53] Fortinet hosts a certification and training program with eight levels of NSE certification.[54][55] It runs the Network Security Academy, which was founded in early 2016. It provides resources to universities teaching IT security classes.[56]

References[edit]

  1. ^ Greene, Tim (April 25, 2016). "New security fabric to unite Fortinet gear with that of other vendors". Network World. Retrieved July 10, 2017. 
  2. ^ a b c d e f "Fortinet Inc. Annual Report 10-K (2016)". Fortinet.com. Retrieved April 8, 2017. 
  3. ^ a b c d e f g Hill, Karen (2012). International Directory of Company Histories:Fortinet. 128. St James Press. pp. 223–227. 
  4. ^ a b Kenneth Tam; Martín H. Hoz Salvador; Ken McAlpine; Rick Basile; Bruce Matsugu; Josh More (December 31, 2012). UTM Security with Fortinet: Mastering FortiOS. Newnes. pp. 16–17. ISBN 978-1-59749-977-4. 
  5. ^ a b Natividad, Beverly (March 2, 2004). "Real-time firewalls preserve performance". BusinessWorld. 
  6. ^ "Fortinet's Money Machine Rolls On". Network Computing. March 3, 2004. Retrieved March 10, 2015. 
  7. ^ Meyer, Cheryl (March 2, 2004). "Fortinet raises $50M". The Deal. 
  8. ^ Torode, Christina (October 24, 2003). "Fortinet Adds New Partner Program". CRN. Retrieved March 10, 2015. 
  9. ^ Zeller, Tom (October 12, 2005). "Study Says Software Makers Supply Tools to Censor Web". The New York Times. Retrieved March 15, 2015. 
  10. ^ IBP, Inc. (August 1, 2013). Myanmar Internet and E-Commerce Investment and Business Guide - Regulations and Opportunities. Lulu.com. pp. 57–58. ISBN 978-1-4387-3445-3. 
  11. ^ Galli, Peter (May 14, 2005). "Fortinet Under Fire for Allegedly Violating GPL Terms". eWeek. Retrieved March 11, 2015. 
  12. ^ Marson, Ingrid (April 14, 2005). "Fortinet accused of GPL violation". ZDNet. Retrieved March 11, 2015. 
  13. ^ Marson, Ingrid (April 26, 2005). "Fortinet settles GPL violation suit". CNET. Retrieved March 11, 2015. 
  14. ^ Gross, Grant (May 13, 2005). "Judge rules for Trend Micro in Fortinet patent case". Infoworld. Retrieved March 11, 2015. 
  15. ^ Roberts, Paul (August 9, 2005). "ITC Rules Against Fortinet in Patent Dispute". eWeek. Retrieved March 10, 2015. 
  16. ^ Hooper, Larry (January 30, 2006). "Fortinet, Trend Micro Settle Antivirus Patent Dispute". CRN. Retrieved March 10, 2015. 
  17. ^ Dunn, John (August 11, 2005). "Fortinet ordered to suspend U.S. sales". Computerworld. Retrieved March 11, 2015. 
  18. ^ Shimel, Alan (April 12, 2011). "The Patent That Refuses To Die". Network World. Retrieved March 14, 2015. 
  19. ^ Wright, Rob (December 20, 2013). "Sophos CEO Slams Fortinet In Response To Employee Poaching Lawsuit". CRN. Retrieved July 6, 2016. 
  20. ^ Williams, Martyn (December 17, 2013). "Fortinet sues Sophos over alleged employee poaching". PCWorld. Retrieved July 6, 2016. 
  21. ^ Kuranda, Sarah (December 10, 2015). "Sophos And Fortinet End 2-Year Legal Feud Over Patents, Talent, Secrets". CRN. Retrieved July 6, 2016. 
  22. ^ Messmer, Ellen (January 3, 2008). "Facebook's "Secret Crush" malicious widget tricks users". Network World. Retrieved August 5, 2016. 
  23. ^ Hines, Matt (January 3, 2008). "Facebook hack fuels Web 2.0 concerns". InfoWorld. Retrieved March 10, 2015. 
  24. ^ McMillan, Robert (June 17, 2008). "Fortinet buys assets of security vendor IPLocks". IDG News Service. Retrieved March 14, 2015. 
  25. ^ Kotadia, Munir (August 20, 2009). "Woven Systems technology lives on with Fortinet". IT News. Retrieved March 13, 2015. 
  26. ^ a b "Computer security co. Fortinet plans IPO this week". Seattle Times. November 17, 2009. Retrieved March 13, 2015. 
  27. ^ Cowan, Lynn (November 19, 2006). "Security Security: Fortinet IPO Jumps 33%". The Wall Street Journal. p. C6. 
  28. ^ DeMarzo, Robert (September 25, 2009). "Fortinet IPO: Love Of Services". CRN. Retrieved March 13, 2015. 
  29. ^ Jackson, Kelly (November 18, 2009). "Product Watch: Fortinet Issues An IPO". Dark Reading. Retrieved March 13, 2015. 
  30. ^ McMillan, Robert (November 18, 2009). "Security Vendor Fortinet Sparkles in IPO". IDG News. Retrieved March 13, 2015. 
  31. ^ Burrows, Peter (November 1, 2010). "Fortinet Said to Be Approached by IBM; Shares Soar". Bloomberg. Retrieved March 13, 2015. 
  32. ^ "Fortinet Says IBM Acquisition Talk Untrue". Reuters. January 11, 2010. Retrieved March 13, 2015. 
  33. ^ Prince, Brian (November 1, 2010). "Fortinet Denies IBM Acquisition Rumors". eWeek. Retrieved March 13, 2015. 
  34. ^ Davis, Jim (December 17, 2012). "Did Fortinet acquire XDN in a bid to add more cache to its portfolio?". 451 Group. Retrieved March 14, 2015. 
  35. ^ Lawson, Stephen (March 22, 2013). "Fortinet to Buy Coyote Point to Merge Security with Application Delivery". IDG News Service. Retrieved March 13, 2015. 
  36. ^ King, Rachel (March 22, 2013). "Fortinet buying Coyote Point for application delivery model". ZDNet. Retrieved March 13, 2015. 
  37. ^ Westervelt, Robert (July 10, 2013). "Fortinet Refines MSSP Program For Broader Reach". CRN. Retrieved March 13, 2015. 
  38. ^ "We Are A 100 Percent Channel Company". CRN. July 15, 2013. 
  39. ^ Eddy, Nathan (September 17, 2014). "McAfee, Symantec Join Cyber Threat Alliance". eWeek. Retrieved March 14, 2015. 
  40. ^ Albanesius, Chloe (February 13, 2015). "Obama Wants Tech Firms to Alert Feds to Cyber Threats". PC Magazine. Retrieved March 13, 2015. 
  41. ^ Owens, Jeremy (May 27, 2015). "Biz Break: Fortinet steps up security challenge to Cisco with Meru acquisition". The San Jose Mercury News. Retrieved June 10, 2015. 
  42. ^ Kuranda, Sarah (May 27, 2015). "Fortinet Dives Deep Into Enterprise Secure Wireless Market With Meru Networks Acquisition". CRN. Retrieved June 10, 2015. 
  43. ^ Weise, Elizabeth (October 22, 2015). "Fitbit hacked from 10 feet away, security firm says". USA TODAY. Retrieved March 10, 2016. 
  44. ^ fitbit (February 11, 2016). "Fitbit hack: '10 second' vulnerability makes wearables spew malware (Wired UK)". Wired UK. Retrieved March 10, 2016. 
  45. ^ Kuranda, Sarah (June 7, 2016). "Fortinet Dives Into SIEM Market With $28M Acquisition Of AccelOps". CRN. Retrieved June 16, 2016. 
  46. ^ Gagliordi, Natalie (June 7, 2016). "Fortinet acquires security analytics firm AccelOps". ZDNet. Retrieved June 16, 2016. 
  47. ^ Edwards, Jane (May 16, 2017). "Fortinet Unveils New Federal Subsidiary, Names Board Members". GovCon Wire. Retrieved July 5, 2017. 
  48. ^ Wilkers, Ross (May 15, 2017). "Fortinet unveils new federal arm". Washington Technology. Retrieved July 5, 2017. 
  49. ^ Barth, Bradley (April 13, 2017). "SC Exclusive: Spyware disguises itself as IRS tax notification". SC Media. Retrieved July 10, 2017. 
  50. ^ Ward, Mark (June 13, 2017). "Apple Mac computers targeted by ransomware and spyware". BBC News. Retrieved July 10, 2017. 
  51. ^ Dellinger, AJ (June 12, 2017). "New Ransomware and Malware Attack on Macs, Macos Allows Hackers to Pay to Use". Newsweek. Retrieved July 10, 2017. 
  52. ^ "Comparing the best NGFWs on the market". SearchSecurity. Retrieved July 15, 2016. 
  53. ^ Yu, Eileen (August 27, 2014). "Fortinet establishes R&D lab in Singapore". ZDNet. Retrieved March 14, 2014. 
  54. ^ Solomon, Howard (July 29, 2014). "New online IT training touted to help meet skills shortage". IT World Canada. Retrieved March 14, 2015. 
  55. ^ Solomon, Howard (July 29, 2014). "Fortinet creates new Network Security Expert certification". IT World Canada. Retrieved March 15, 2015. 
  56. ^ "Intel, Fortinet, launch cybersecurity initiatives". San Jose Mercury News. March 22, 2016. Retrieved June 24, 2016. 

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