Notes: Fortinet - Huge Promise With Notable Caveats From The Lacework Acquisition
Summary
- Mid-2024 cybersecurity M&A saw surprising acquisitions with Wiz attempting to acquire Lacework before Fortinet emerging as the buyer, catching many off guard.
- Lacework's downfall began in 2022 due to management decisions, lack of differentiation, and challenges in cost-effectiveness and product development.
- Fortinet's acquisition of Lacework could potentially fill gaps in its cloud security portfolio, improve its GTM efforts, and leverage Lacework's valuable data infrastructure for future growth.
Mid-2024 has been a wild ride for cybersecurity M&A. Initially, rumors circulated that Wiz would acquire Lacework, shocking many due to the overlap between the two vendors. Subsequently, Lacework released Lacework SSE, a product that seemed out of sync with its core platform, late to market, and lacking differentiation. This move sparked speculation about potential acquirers for Lacework, as major cybersecurity players already had their own solutions. Surprisingly, Fortinet emerged as the buyer, catching many, including us, off guard. In a separate development, rumors surfaced about Google acquiring Wiz for $23 billion, but these were quickly dismissed by Wiz's CEO, who stated that the company was approaching $1 billion in ARR and aiming for an IPO.
Thoughts about Lacework History
For Lacework, the downfall began in 2022, rooted in decisions made by management and investors. Many investors were drawn to Lacework because it was another company led by Mike Speiser, a General Partner at Sutter Hill Ventures (SHV). Speiser, as an outsider, had previously foreseen the disruptive potential of cloud in the data analytics world. He recruited two database kernel experts from Oracle and served as the first CEO of SNOW (as discussed in our initial Lacework report). SNOW's success became one of the biggest triumphs in the venture capital industry, prompting investors to eagerly join another potential success story before it was too late.
