Which also combined with the supply chain kind of elevated shipment of building in the last 2, 3 years. Because it’s combined together, I feel have affected our price sales in the last few months. But I do believe this since we’ll go back to normal probably in second half of next year. After the new product being fully launched after the supply digestion but inventory directions kind of go through because we do see the long-term convergence story is still holding well. We have a big position with better integrated OS with salvation. And our plan as a part of the whole solution. It’s a hybrid solution, both our part cloud, especially we call the universal SASE. So that’s — there’s some kind of cycle, if you refer to the Page 19 of the presentation, we kind of probably go through that cycle right now.
Keith Jensen: Yes, Tal, I’ll maybe add to Ken’s comments. I think you’re correct in that, your interest that the vast majority of the time, our first sales to customers a firewall. It can be a virtual firewall or it could be a physical appliance. And really, that is the beachhead that then go sell these other security functions and products. I think what you’re seeing is in part of the shift of strategy and we talk about making the investments in note SASE but also SecOps. It’s really that SecOps product family like EDR and SIM and so as such, that you’re seeing is doubling down on the investments there because while it’s not the largest of the 3 market segments, it is the fastest growing. And I think we have the opportunity to participate in those markets more, particularly now that some of our products have reached a greater level of maturity.
Operator: Our next question comes from Saket Kalia from Barclays.
Saket Kalia: Okay, great. Ken, I’m going to ask 2 together. So maybe for the first one, Ken, for you. Just maybe thinking about the long term and specifically in the SASE part of the business, when do you feel like Fortinet will have a solution that can compete head-to-head with other SASE solutions? Maybe the answer is now, right but I just want to hear how you think about it. And how big do you think this part of the business can be longer term? That’s the first question. The second question for you, Keith, is it’s great to see the operating margin being. Maybe you could just talk about how you’re thinking about sort of midterm profitability — because clearly, the business can generate higher margins than 25%. How do you sort of think about that balance now kind of given some of the changes here?
Ken Xie: Yes. The first answer is, yes, now we are ahead at competing. And we also believe we have a much better solution, better integrated and at the same time, much better cost ROI compared to other competitors of SASE. And also the universal SASE is very unique because they offer both in the cloud, on the plans of Compass all the same solution which allows the customer a more like our solution instead of sometimes you have to deal with traffic, whether enough is office have to fold the part because our solution you can process some traffic locally on campus within their appliance.
Keith Jensen: Yes. So you had a great point about whether you’re talking about free cash flow, you’re talking about operating margin. The company does very, very well on the bottom line. And the strategy has been to continue to reinvest that back robustly in both innovation in the form of R&D spending but also in go-to-market, whether that’s marketing, whether that’s selling. I think we’re looking at right now with the sort of firewall market. Obviously, we’re trying to bring new solutions to better solutions to our sellers to sell when the firewall is a little bit slower. But I do think it’s a workout conversation and looking at the sales coverage, if you will. We’ve talked for several years about how many — in North America, for example, how many accounts do we want per rep.
We started with 65, I think, 4 or 5 years ago. We were talking about that. That number is now down to 10. And at 10, you’re probably reaching a point of where you’re — on the enterprise side, you’re probably reaching a pretty good coverage model for our business. You could probably go a little bit lower but that feels pretty good. I think there’s another opportunity right now immediately in front of us in terms of how do we continue to support our channel partners, be they distributors or be they resellers and make sure that we’re getting the right level of mind share from them. So I would suspect there will be some investments in that part of the business as we go forward. At the same time, I think there’s some opportunities here and Ken’s talked about it with us about how to be more efficient in how we’re spending our money, whether that’s in selling and marketing or back office functions or what have you.
So — we’re not trying to guide to 2024 today, obviously but we did think that it was important to provide at least some early thoughts in terms of maybe a floor for what 2024 should look like for us on the bottom line.
Operator: [Operator Instructions] Our next question comes from Brad Zelnick from Deutsche Bank.
Brad Zelnick: Great. I appreciate that as you lean into SASE and security operations, your most obvious advantage is in having an industry-leading installed base. But for those of us that have always viewed Fortinet’s distinct advantage is the price performance of your purpose-built hardware and you’ve also had a go to market, both direct and indirect that know how to showcase that. I’m just trying to get my head around all the changes in distribution, both direct and indirect which I appreciate, Keith, you made comments about sales enablement. But how do you think about the investment in dollars in time needed to get distribution properly ramped? And can you ever achieve the same level of sales productivity that you’ve enjoyed when the motion was more box-centric?
