Fortinet posted a “better-than-expected” first fiscal quarter of 2022. CEO Ken Xie noted the bookings of its SD-WAN and operational technology (OT) services grew faster than overall business, and he saw a bigger market in OT than SD-WAN amidst the current elevated threat environment.

The security giant’s overall bookings in the quarter surged 50% year over year to 1,276 billion, while SD-WAN and OT bookings increased by 54% and 76% respectively.

“The OT definitely sees a bigger market going forward, probably bigger than the SD-WAN, which we see pretty strong growth,” Xie said during the earnings call. “So that's where we do see a lot of potentials, and we also invest a lot in this area to meet the demand.”

The OT section accounted for nearly 10% of Fortinet’s business by the end of the quarter, he added. 

Overall, Fortinet banked $954.8 million for the first quarter, a 34.4% increase year over year.

On top of the heightened threat environment, the increasing demand from the manufacturing vertical also drove growth. “That really speaks to the threat environment, ransomware, OT, things of that nature, manufacturing is trying desperately to break into the top five of our verticals and getting them closer and closer every quarter,” Fortinet CFO Keith Jensen said.

Custom Chips, Redesigned Products, Broad Portfolio Reduce Supply Chain Limitations

Fortinet recently announced a new suite of its FortiGate next-generation firewalls. And the vendor re-engineered one of the series 70F to enable alternative part sourcing. 

“We started the redesign effort end of last year without the supply restriction audience,” Xie explained. “Even the 600 F [series] probably would move to redesign, and then some of them also leverage our new FortiASIC chip.”

Fortinet works with a manufacturer to custom make ASIC chips, which also helps secure the supply chain. “That's where compared to a lot of other vendors using third-party, on-time supply, which is more difficult to deal with the current supply chain issue,” he said. 

Additionally, the company’s broader product portfolio gives customers more choices. 

“There's a lot of new cases, which our competitors don't have in solution like the SD-WAN vertical to OT, some other part, which also drives quite a lot of additional growth for us,” Xie boasted.