Fortinet's Channel Struggles vs. Sophos' Partner Play: A Cybersecurity Leadership Shift

The cybersecurity industry's reliance on robust partner ecosystems has never been more critical. As vendors compete for market share, the health of their channel networks directly impacts long-term viability. Fortinet, long a cybersecurity titan, now faces scrutiny over its shifting partner policies, while Sophos emerges as a strategic disruptor with a channel-first mindset. This article explores how these dynamics could redefine industry leadership—and where investors should place their bets.

Fortinet's Channel Crossroads: Cost Pressures and Partner Friction

Fortinet's recent moves in cloud management and partner support have raised red flags. Its FortiCloud updates (versions 25.2 and 25.2.a) introduced stricter licensing, requiring partners to pay for previously free features like config backups and scripting tools. While these changes aim to monetize cloud services, partners report growing dissatisfaction.

A key issue is the elimination of NFR (Not-for-Resale) access for critical tools. Unlike Sophos, which expanded NFR renewals and discounts for MDR services, Fortinet's policy shift forces partners to bear incremental costs for demos, trials, and internal use. This could drive partners toward competitors offering more flexible terms.

Market feedback underscores the strain. MSPs and resellers cite bureaucratic processes for FortiCloud account management and asset transfers, which now depend on the “latest EA contract” rather than historical agreements. Combined with Fortinet's 7% YoY decline in partner satisfaction ratings (per internal surveys cited in leaked reports), these challenges hint at a widening gap between vendor goals and partner needs.

Financially, Fortinet's service revenue grew 19.8% YoY to $4.05B in 2024, but this masks underlying risks. High retention costs for partners—due to licensing complexity—could erode margins as competitors poach channel relationships.

Sophos' Channel Mastery: NFR, Incentives, and MSP Growth

Sophos, by contrast, has prioritized partner enablement. Its 2025 programs, including the MSP Elevate initiative, offer rebates (up to 10% on SKUs), automated NFR renewals, and tools like “Network-in-a-Box” bundles to simplify sales. Partners gain access to Sophos XDR and MDR Complete, backed by a 4.8/5.0 customer satisfaction rating from Gartner.

Sophos' NFR policies stand out:
- Automatic $0 NFR renewals for eligible licenses, reducing administrative burdens.
- 10-point MDR discount increases, lowering partner costs for managed services.
- Legacy product migration support (e.g., phasing out UTM with easy XGS Firewall transitions).

These efforts have fueled Sophos' market share gains. Its MSP Connect program now supports 16,500+ partners, up 22% YoY, and contributed to 67% billings growth in 2024. Partners report 48% faster sales cycles thanks to Sophos' unified platform and training resources.

The Cultural Disconnect: Fortinet's Internal Struggles

Behind Fortinet's channel woes may lie deeper cultural issues. Glassdoor reviews highlight a “rigid hierarchy” and “slow decision-making,” with employees criticizing leadership's focus on top-line growth over partner satisfaction. One Fortinet employee noted, “Partners are treated as transactional relationships, not strategic allies.”

This internal disconnect could amplify external friction. Partners increasingly prioritize vendors that align with their operational needs. Sophos' 24/7 Partner Care team and real-time NFR support—absent in Fortinet's offerings—reinforce its reputation as a partner-centric brand.

Investment Implications: Fortinet's Undervaluation Risk vs. Sophos' Momentum

For investors, the stakes are clear:
1. Fortinet's Risks: Its reliance on paid cloud features may backfire as partners seek simpler, cost-effective alternatives. A would likely show widening gaps. Its stock, up 15% YTD, may face headwinds if channel attrition accelerates.
2. Sophos' Opportunity: With a 40% YTD stock surge and 20% CAGR in endpoint security markets, Sophos is positioned to capitalize on Fortinet's missteps. Its MSP-focused strategy and NFR flexibility lower barriers to entry for new partners.

Actionable Takeaway:
- Sell FTNT: If channel attrition exceeds 5% in 2025, Fortinet's valuation could drop by 15-20%, reflecting eroded partner trust.
- Buy SOPH: Sophos' 12% free cash flow margin and 20%+ revenue growth trajectory make it a safer, growth-oriented play.

Conclusion

In cybersecurity, channel health is the ultimate arbiter of long-term success. Fortinet's shift toward monetizing every feature risks alienating partners in a crowded market. Sophos, meanwhile, is turning its partner-friendly ecosystem into a moat. Investors would be wise to heed this divide—and position portfolios accordingly.

The channel is the new battlefield. Sophos has seized the high ground. Fortinet's path to recovery is unclear—and costly to ignore.