VOL. XCIV, NO. 247
★ MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Friday, December 26, 2025
Fortinet, Inc.
FTNT · NASDAQ
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Fortinet is a cybersecurity vendor focused on secure networking (FortiGate firewalls, SD-WAN/SASE) and recurring subscriptions/support (FortiGuard and FortiCare). Its moat is anchored in an integrated platform (Security Fabric/FortiOS) and proprietary security processors that support strong price-performance and vendor consolidation. Service revenue is predominantly subscription and support renewals tied to the installed base, often on multi-year terms. Key risks include fast-moving competition, the shift of security spend toward cloud-native/SaaS controls, and pricing pressure during refresh cycles.
Primary segment
Subscriptions & Support Services
Market structure
Quasi-Monopoly
Market share
—
HHI: —
Coverage
2 segments · 6 tags
Updated 2025-12-26
Segments
Secure Networking Products
Network firewall and secure networking platforms (NGFW, secure SD-WAN, virtual firewalls)
Revenue
32%
Structure
Oligopoly
Pricing
moderate
Share
50%-55% (reported)
Peers
Subscriptions & Support Services
Cybersecurity subscriptions and technical support for Fortinet installed base (FortiGuard + FortiCare)
Revenue
68%
Structure
Quasi-Monopoly
Pricing
strong
Share
—
Peers
Moat Claims
Secure Networking Products
Network firewall and secure networking platforms (NGFW, secure SD-WAN, virtual firewalls)
Fortinet reports one operating segment; this split follows reported revenue categories (Product vs Service) for moat profiling.
Suite Bundling
Demand
Suite Bundling
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Platform approach (Security Fabric) spans networking + security, supporting consolidation of point products and cross-sell.
Erosion risks
- Best-of-breed point solutions regain share
- Cloud-native security reduces on-prem appliance demand
- Platform sprawl increases complexity and security bugs
Leading indicators
- Attach-rate of subscriptions to product sales
- Multi-product adoption per customer
- Competitive win/loss rates in large enterprise deals
Counterarguments
- Large enterprises may prefer specialist vendors for specific controls
- Security teams can maintain multi-vendor stacks despite platform messaging
Keystone Component
Supply
Keystone Component
Strength: 4/5 · Durability: medium · Confidence: 4/5 · 1 evidence
Custom security processors (ASIC/SPU) aim to deliver performance-per-watt and cost advantages versus general-purpose architectures.
Erosion risks
- Shift to virtual/cloud firewalls reduces ASIC differentiation
- Competitors narrow performance gap with their own silicon or DPUs
- Foundry/supply disruptions constrain availability
Leading indicators
- Independent performance benchmarks vs peers
- Product gross margin trend
- Mix shift toward software/SaaS form factors
Counterarguments
- Cloud-delivered security shifts value from appliance throughput to SaaS controls
- Software optimization on commodity hardware can reduce the need for custom ASICs
Scope Economies
Supply
Scope Economies
Strength: 3/5 · Durability: durable · Confidence: 3/5 · 1 evidence
Single operating system and shared platform components can spread R&D across many form factors and features, speeding rollout and reducing unit cost.
Erosion risks
- Large integrated codebase increases vulnerability blast radius
- Competitors match breadth via acquisitions and partnerships
Leading indicators
- Major CVEs affecting FortiOS and patch cadence
- Release frequency and feature parity across form factors
Counterarguments
- Other major vendors also run unified platforms across product families
- Breadth does not guarantee best-in-class outcomes in each workload
Benchmark Pricing Power
Financial
Benchmark Pricing Power
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Value-based pricing supported by performance and integration, but competitive dynamics can force tactical price moves.
Erosion risks
- Aggressive competitor discounting in refresh cycles
- Hardware commoditization in lower-end segments
Leading indicators
- Average selling price trends for FortiGate
- Competitive discounting intensity reported by channel partners
Counterarguments
- Customers often benchmark firewall pricing aggressively across vendors
- Refresh timing can increase buyer leverage on pricing
Subscriptions & Support Services
Cybersecurity subscriptions and technical support for Fortinet installed base (FortiGuard + FortiCare)
Service revenue (subscriptions + support) is reported as a single category; moat assessment focuses on the aftermarket nature of security updates and support.
Installed Base Consumables
Demand
Installed Base Consumables
Strength: 5/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Security subscriptions and support renewals are tied to Fortinet's installed base, driving recurring service revenue.
Erosion risks
- Customers migrate to cloud-native SASE/SSE vendors at refresh
- Lower subscription attach rates on new product sales
- Budget pressure reduces renewal scope or tiers
Leading indicators
- Deferred revenue balance and growth
- Service revenue growth rate vs installed base growth
- Subscription attach rate to product billings
Counterarguments
- Renewal events create natural switching moments if value perception declines
- Some customers outsource security and standardize on different platforms
Long Term Contracts
Demand
Long Term Contracts
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 1 evidence
Typical multi-year service terms smooth revenue and reduce short-term churn sensitivity.
Erosion risks
- Shift toward shorter-term or usage-based contracts in cloud services
- Partner-led deals reduce vendor control over renewals
Leading indicators
- Mix of contract duration (1-year vs multi-year) in billings
- Renewal timing concentration and churn around major refresh cycles
Counterarguments
- Multi-year terms do not prevent switching at renewal, only delay it
- Competitive bundling can pull customers away at contract expiration
Switching Costs General
Demand
Switching Costs General
Strength: 4/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Operational switching costs via unified OS, policies, and management/analytics across many deployed edges.
Erosion risks
- Standard APIs and orchestration reduce vendor-specific lock-in
- Managed security services shift control away from customer tooling choices
Leading indicators
- Customer adoption of centralized management (e.g., FortiManager/FortiAnalyzer) features
- Churn around major platform transitions (cloud vs on-prem)
Counterarguments
- Security teams can decouple operations by using third-party SIEM/SOAR tooling
- Many organizations accept multi-vendor complexity to optimize security outcomes
Evidence
Our integrated cybersecurity platform, the Fortinet Security Fabric, spans secure networking, unified SASE and AI-driven security operations.
Management frames the offer as an integrated platform across pillars, enabling customers to consolidate vendors.
Fortinet has natively developed the key SASE functions, tightly integrating Next-Generation Firewall, SD-WAN, and SASE functionality into one unified 'New Generation SASE Firewall' solution.
Supports the convergence/bundling narrative across NGFW, SD-WAN, and SASE.
We leverage proprietary ASIC technology that accelerates the processing of security and networking functions.
Highlights a differentiated hardware component that can underpin throughput/latency advantages and competitive price-performance.
FortiOS is the unified operating system (OS) that runs the broad portfolio of technologies that comprise the Fortinet Security Fabric.
A single OS across a broad portfolio supports platform reuse and economics of scope.
During the first quarter of 2024, we lowered list prices on select products.
Directly indicates price competition and limits on broad, unilateral price increases.
Showing 5 of 11 sources.
Risks & Indicators
Erosion risks
- Best-of-breed point solutions regain share
- Cloud-native security reduces on-prem appliance demand
- Platform sprawl increases complexity and security bugs
- Shift to virtual/cloud firewalls reduces ASIC differentiation
- Competitors narrow performance gap with their own silicon or DPUs
- Foundry/supply disruptions constrain availability
Leading indicators
- Attach-rate of subscriptions to product sales
- Multi-product adoption per customer
- Competitive win/loss rates in large enterprise deals
- Independent performance benchmarks vs peers
- Product gross margin trend
- Mix shift toward software/SaaS form factors
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.