Fortinet announced plans to acquire Lacework, a Cloud-Native Application Protection Platform (CNAPP) company. For those who have kept up with the cybersecurity industry news, in April of this year, Lacework was an acquisition target by privately held Wiz. However, that deal, reportedly valued between $150-200M, never materialized.
Lacework opens up a significant new opportunity for Fortinet, expanding its addressable market by billions of dollars. In addition to the new market opportunities, the acquisition will bring nearly 1,000 CNAPP customers and a seat at the table with mid- to large-sized organizations’ Chief Information Security Officers (CISOs). The importance of Fortinet’s audience with CISOs lies in the potential to upsell other software capabilities like FortiSIEM and FortiSOAR, among other Security products that differ from Fortinet’s larger revenue-contributing products like Firewalls, Networking and SASE products.
Lacework raised $1.8B and was viewed as a high-valued cybersecurity unicorn. We don’t know how much of the total money raised went towards engineering efforts, but it must have been substantial given that it raised an astounding $1.3B in its last 2021 multi-billion financing round. The deal was surprising given that Fortinet has not been acquisitive in the past, and it might have just gotten a bargain.
The cybersecurity industry’s competitive landscape has changed significantly in 2024 with Palo Alto Network’s planned acquisition of IBM’s SIEM assets, Cisco’s Splunk acquisition, and many others. But, amongst these giant security industry players, each is vying for a more significant audience with CISOs and for cloud-security capabilities like CNAPP (in Fortinet’s case) and SIEM (in Palo Alto’s and Cisco’s cases). We forecast that technologies like CNAPP and SIEM will grow much faster than more mature technologies like Firewall, illustrating why these giants are pushing into these segments.
If we add the 2028 market size for the various markets in which Lacework participates (which can generally be categorized as CNAPP), Fortinet’s total addressable market grows by nearly $10B. To learn more about the markets Lacework participates in, you may learn more about CNAPP, CWP, Application Security, CSPM and more here.