Fortinet, known for network security capabilities within its Fortinet Security Fabric cybersecurity platform, is bolstering its AI and cloud security capabilities with the planned acquisition of Lacework and its AI-based offerings.

The companies announced the proposed deal on Monday, with expectations that it will close in the second half of the year. The plan is to integrate Lacework’s cloud-native application protection platform (CNAPP) capabilities into Fortinet’s Unified SASE (secure access service edge) offering. It’s a move that company executives said will give Fortinet more cloud security capabilities at a time when the IT environment is becoming more distributed, stretching from the data center to the cloud and out to the edge.

“The two most important and foundational elements of any CNAPP are its ability to identify and prioritize risks and its ability to identify and prioritize threats,” Fortinet Chief Marketing Officer John Maddison wrote in a blog post. “These two information sets reinforce one another and allow you to gain a deep understanding of your overall security posture. That’s why your CNAPP, all in a single platform, should be able to not only tell you what your risks and threats are, it should be able to tell you how those two things intersect to offer actionable intelligence.”

Most CNAPP vendors offer organizations tools for identifying risks or threats, Maddison wrote, adding that Lacework does both with a platform that’s driven by AI and machine learning capabilities, data collection via an agent and agentless architecture, its own data lake, and code security functions.

“Lacework delivers an advanced AI-powered cloud security platform that seamlessly integrates all critical CNAPP services to protect what’s happening ‘inside’ the cloud,” he wrote.

Latest Step in New Business Strategy

The acquisition would fall in line with a unified SASE growth strategy outlined in November 2023, with its R&D and go-to-market efforts centered around three markets, unified SASE, secure networking and security operations, with founder, Chairman and CEO Ken Xie at the time saying that since the company’s launch in 2000, “our founding principles of converging networking and security and consolidating point products into an integrated platform continue to reverberate across today’s cybersecurity market.”

The company has complemented its innovation in network and security over the years with acquisitions, including DevOps security startup Sken.ai in 2021 and cloud security and networking company OPAQ Networks the year before.

Fortinet wrapped up its fiscal year 2023 with $5.3 billion in revenue, a 20.1% year-over-year jump. Service revenues were up 28.1%, while product sales increased 8.2%. It has more than 500,000 customers, including Best Western Hotels and Resorts, Alaska Airlines, Staples, Black and Decker and AT&T.

Lacework Attracts Attention

Lacework, founded in 2015, has recently been the focus of acquisition chatter in the industry, with reports surfacing in April that it was close to being bought by cloud security company Wiz. No details about the deal with Fortinet were released, but Wiz was reportedly ready to buy Lacework for $150 million to $200 million.

That’s a far cry from November 2021, when after raising $1.3 billion in an investment Lacework’s value was pegged at $8.3 billion. But that was before a wave of consolidation in the fast-growing cloud security market began. Analysts at Fortune Business Insights said the global cloud security market last year reached $37.87 billion, with expectations that it will hit $156.25 billion by 2032, driven in large part by the dynamics found within cloud environments.

Those include the demand for cloud security solutions to monitor large amounts of data and structured information and the ongoing push by major players like Cisco and IBM to adopt cloud computing in their cybersecurity offerings that deliver capabilities in an as-a-service model, according to the Fortune Business analysts. There also is a growing need for large storage applications with advanced security models to store the massive amounts of data being created in the cloud.

“Furthermore, cloud workloads are highly dynamic, with instances being spun up and down rapidly in response to changing demand,” they wrote. “Traditional security approaches based on perimeter defenses and static policies are insufficient for securing dynamic cloud environments. Cloud security solutions leverage automation, machine learning and behavioral analysis to adapt to the dynamic nature of cloud workloads and detect and respond to security threats in real-time.”

An Expanded Portfolio

Lacework over the years has bolstered its platform with not only security for the cloud but also for the edge and developer code. Over the past year that has included the launch of features like Lacework AI Assist, providing greater context to security alerts via generative AI and Smart Fix to automate third-party security fixes, saving developers from having to do that manually.

The company has almost 1,000 customers, including cloud data company Snowflake, online lending marketplace Lending Tree, and health consultancy Omada Health.

“With the integration of our AI-driven security operations for the cloud into Fortinet’s Unified SASE solution, our customers will have the added benefit of the scale and expertise of our combined platforms,” Lacework executives wrote in a blog post. “Combining Fortinet’s network and data center security capabilities with Lacework cloud security offerings will enable the modern enterprise to manage risk and reduce threats across the entire IT landscape.”

Fortinet plans to integrate Lacework’s capabilities with the web application and API protection (WAAP) and cloud firewalls in the Unified SASE platform. SASE is a network framework that brings together cloud security and wide area network (WAN) capabilities to enable secure connectivity for users, systems, and endpoints to applications and services wherever they’re located.

The integration will give organizations more capabilities for identifying, prioritizing, and remediating risks and threats in their cloud infrastructure, Fortinet’s Maddison wrote.

“Specifically, the combination will allow customers to protect what’s happening inside the cloud app along with what’s happening between the app and the outside world,” he wrote.