Fortinet CEO: innovate or die

In an exclusive pre-conference briefing with SC Magazine UK he said that: “Innovation slows down once companies get too big. They become slow to react to changes in the marketplace”

But he added that: “The challenge for small niche players is to grow beyond that niche, keep innovating and ensure engineering has the upper hand”.

Xie said that of his 1000 employees, 500 were engineers. “That’s the biggest ratio of engineers of any security company”.

He said that companies cannot innovate by acquisition. “Cisco has bought more than 10 different companies in the last 15 years but has never been able to integrate products”.

Xie is looking to keep Fortinet on a claimed 30-50 per cent annual growth rate and he threw down the gauntlet to his rivals in the network appliance market. “In one or two years Fortinet will take over Juniper and be number two behind Cisco” he told SC.

However he ruled out an early IPO. “The business is cash rich so there is no need for cash. There are some benefits to being a public company but there are also disadvantages. Many recent IPOs are currently below offer price” he said.

“When the market is more open we may consider it but at the moment we are focused on becoming the industry leader” he said.

Commenting on the downturn in the US economy he said that the UTM sector was well placed as IT departments look to conserve costs and consolidate technologies.

“UTM will take over the traditional firewall market and will be a $2 billion market by 2010” he said.