SMAC and BYOD are pushing tech companies to partner and expand in cybersecurity space
Previously in the series, we discussed Fortinet’s (FTNT) fiscal 3Q15 results and the company’s tepid future guidance. We saw how this led to a steep fall in share prices for Fortinet and its peers in the cybersecurity space.
Let’s look at the growth of network security players in 2Q15, namely Check Point Software Technologies (CHKP), Cisco Systems (CSCO), Fortinet, and Palo Alto Networks (PANW). As you can see in the graph below, they’ve all witnessed double-digit growth. Increasing data breaches are providing growth avenues for cybersecurity companies.
Now let’s look at the broader IT trend that’s changing the cybersecurity landscape. Rapid innovation and developments in big data, cloud, and mobile computing are transforming the information technology (or IT) sector. The following have enabled consumers and employees to access confidential data and information outside original, secure data centers and firewalls:
- SMAC (social, mobile, analytics, and cloud) revolution
- BYOD (bring-your-own-device) concept
- increase in the mobile workforce
This has led to a significant increase in information theft. As a result, companies are either spending billion of dollars upgrading their systems or are entering into partnerships with security firms to protect their data as well as expand their cybersecurity space.
Capgemini and Fortinet joined hands to provide cybersecurity services to enterprise space
On October 1, 2015, Capgemini, a leading provider of consulting, technology, and outsourcing services, announced its partnership with Fortinet. Fortinet’s product portfolio includes FortiWeb, FortiGate, and FortiDDoS. This product portfolio will be part of Capgemini’s tailored security services for infrastructure, application, and network protection.
The alliance between the two companies will benefit other companies by providing innovative security products from Fortinet and effective cybersecurity services from Capgemini.
If you’re bullish about Fortinet’s prospects, you could invest in the PureFunds ISE Cyber Security ETF (HACK). HACK invests about 5.0% of its holdings in Fortinet.