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MSSPs, SD-WANs Boost Fortinet SMB Cybersecurity Revenues

Fortinet CFO Keith Jensen

Ken Xie, CEO, Fortinet

Despite the challenging economy, Fortinet seeks growing momentum for MSSP partners that serve small business customers, according to CEO Ken Xie. Moreover, CFO Keith Jensen sees ample opportunity for MSSPs that offer SD-WAN services to end-customers. The comments surfaced on Fortinet’s May 6 earnings call with Wall Street analysts.

MSSP channel partners drove roughly 19 percent of Fortinet’s revenues in Q1 2020. Dig a little deeper, and the percentage of Fortinet’s revenues coming from SMB customers rose 1 percent to 2 percent during the quarter, Xie estimated.

Think about the numbers this way: Fortinet’s overall Q1 revenue was $576.9 million — up 22 percent compared to the corresponding quarter in 2019. Now, consider that MSSPs are a prime reason SMBs represent a growing slice of that rapidly expanding Fortinet revenue pie — in which every one percent gain represents roughly $5.8 million in revenue.

Fortinet and MSSPs: 3 Reasons for SMB Security Momentum

What’s driving the MSSP-oriented SMB revenue growth? Xie points to three potential reasons:

  1. Home Network Security: A very small percentage of SMB work-from-home users have network security solutions in place, providing a prime opportunity for MSSPs to implement Fortinet solutions.
  2. Converged Opportunities: The combination of SD-WAN and WiFi services can save costs, boost efficiencies and improve security.
  3. Product Refreshes: Fortinet’s F model product refreshes in recent quarters are helping to drive SMB and Work From Home solutions.

Roll those variables together, and Fortinet’s SMB security business — assisted by MSSPs — is likely growing faster than the industry averages, Xie surmised during the earnings call.

Fortinet SD-WANs: The MSSP Opportunity

On a broader scale, Fortinet also sees potential upside for the overall SD-WAN market opportunity. According to CFO Keith Jensen:

“I think in terms of the SD-WAN and the MSSPs, I would characterize that as being a market that we’re very interested in because it’s a very large market. Obviously, the MSSPs have already come to it with an incumbent that we’re trying to displace. But that opportunity, without quantifying it, if you will, is something that I would say we’re very focused on internally.”

Fortinet’s revenues show strong industry momentum. But the company also faces intense competition in the SD-WAN market. Key MSSP-focused players in the SD-WAN market include Cisco Systems, Palo Alto Networks, Netsurion, SonicWall and WatchGuard, among others.

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