SUNNYVALE, Calif. (TheStreet) -- Earlier this year, Fortinet (FTNT) was a relatively little-known security company, quietly duking it with security software's biggest names. Fast forward a few months, and Fortinet is suddenly being touted as a potential acquisition target for Hewlett-Packard (HPQ), IBM (IBM), Dell (DELL) and Oracle (ORCL).
So, what is Fortinet, and why is the company such hot property?
One of the first firms to offer an all-in-one approach to network security, Fortinet, which competes with Cisco (CSCO), Check Point Systems (CHKP) and McAfee (MFE), touts its FortiGate appliance as a sort of Swiss Army knife for network security: it combines firewall, antivirus, VPN and intrusion prevention systems.
"We like that Fortinet helps to simplify an overly complex network security landscape," said Jayson Noland, an analyst at R.W. Baird, in an email to TheStreet. "Fortinet's concept of a Universal Threat management (UTM) appliance was well ahead of its time -- Fortinet also offers performance advantages given the [company's] silicon expertise."Fortinet's processors have been fine-tuned to quickly detect complex cyber-threats without impacting network performance. As online threats become ever more sophisticated with the advent of smarter smartphone software and other, less-secure mobile devices, cybersecurity has become much higher profile, spelling good news for Fortinet. Mirroring the company's solid stock performance over much of this year, Fortinet is also enjoying robust sales: Its recent second-quarter revenue was up 24% compared to the same period last year, driven by strong demand from both enterprises and service providers. In total, more than 500,000 FortiGates have been shipped to over 75,000 customers worldwide since Fortinet launched its first product in 2002. Earlier this month, Fortinet also announced that the FortiGate appliances are approved for use by all Department of Defense agencies; the devices' FortiOS operating system recently achieved a coveted computer security standard used by the government, which bodes well for the company's expanding sector of federal jobs. One of TheStreet's Breakout Stocks, Fortinet, which went public last year, lists NTT (NTT), Nissan, Chungwa Telecom, and the UAE Central Bank among its customers, and derives nearly 60% of its revenue from its high-margin subscription business.
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