2024-03-15 06:13:52 ET
Summary
- Fortinet's divergent SASE strategy makes it the most adaptive vendor in the future evolution of networking and network security.
- In fact, we have actually created a variant of SASE, called SASO, to better represent FTNT's ability in converged networking & security. We also believe SASO will gradually subsume.
- SASE or SASO is just the 'first mile' within the broader networking landscape. We explain the Company's growth opportunities in the middle and last miles, too.
- Relatively, we believe FTNT's valuation looks attractive if investors can see beyond the NTM guidance. Our deeper valuation also suggests a ~50% upside for a $100 PT.
The SASE and Fortinet Backstory
Since Gartner unveiled SASE (Secure Access Service Edge) in 2019, the concept has dominated networking and network security. Immediately following Gartner's new concept, vendors from both networking and network security made a beeline to promote themselves as native SASE providers. This was far from the truth, however, because neither the networking players with SD-WAN, like CSCO, nor the cloud-delivered network security players, like ZS, had the full suite of capabilities. Unfortunately, this led to many enterprises being duped, going with who they believed was a holistic SASE provider, only to later discover that numerous third-part integrations were required to make the SASE work, dramatically driving up the TCO.
The early dissatisfaction with SASE was in large part attributed to Gartner's approach to promoting the concept, which gave vendors the opportunity to mislead, and overall, it created market confusion. When Gartner first released SASE, the publication was very high-level, without any specifics or vendor analysis. Meanwhile, they continued to periodically publish their Magic Quadrant (we'll refer to this as MQ) for WAN Edge Infrastructure, later renamed SD-WAN in 2022, which is the networking side of SASE. However, they waited nearly three years following their initial SASE report before they released an MQ for the security side of SASE in February 2022, named SSE (Secure Service Edge)....
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For further details see:
Fortinet: A Long Runway Of Growth Across SASE, SASO, And Beyond