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Would New Offerings Provide FireEye with a Much-Needed Push?

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FireEye targets diverse deployment options for its offerings

Earlier in this series, we discussed the expected growth in the cybersecurity space. Let’s look into FireEye’s (FEYE) strategy, as the cybersecurity player seeks to grow by deploying its security technologies in the cloud as well as on site.

During the company’s 3Q16 earnings call, Kevin Mandia, FireEye’s CEO, said, “I believe FireEye knows more about what cyber attackers are doing than anyone else, and our platform now protects our customers from these attackers in the cloud, on-premise, or both.”
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FireEye’s new offerings: Cloud MVX and MVX Smart Grid

FireEye (FEYE) intends to separate its MVX services that had been tied to the company’s devices. During the company’s 3Q16 earnings call, Mandia said, “MVX separation refers to us splitting the two primary functions of our MVX analysis, the network sensor and our MVX analysis engine, into two separate components, and this allows us to deliver our capability from the cloud or on-premise with hardware, software and virtual form factors.”

Along with its fiscal 3Q16 results, FireEye launched two new offerings, Cloud MVX and MVX Smart Grid. According to FireEye, “Cloud MVX provides a FireEye public cloud deployment of the MVX engine, allowing organizations to shift threat detection to the cloud, making the most intelligent security available anywhere, at any time, on a subscription basis.”

A private cloud offering, MVX Smart Grid employs MVX Engine and Smart Nodes to examine Internet traffic to detect and terminate external threats. Mandia noted during a November 9, 2016, interview with Benzinga that these offerings provide a “best of breed detection at a price point for folks that might be more cost conscious.”

Pricing and growth

However, competitive pricing cannot be expected from these offerings. Mandia added that these offerings “will always have a premium price because they invest more in gaining intelligence about bad guys than any other company” that he could identify.

FireEye’s (FEYE) focus on the SaaS space generates hope among its investors, as SaaS is expected to be the fastest-growing segment in the cloud space. Cisco’s (CSCO) Global Cloud Index report recently stated that SaaS is expected to grow at a CAGR[1. compound annual growth rate] of 33%. The cloud market as a whole is expected to grow at a CAGR of 24% until 2018.

In early October 2016, we noted that Microsoft (MSFT) claimed Salesforce’s (CRM) leadership position and emerged as the overall enterprise SaaS market leader.

Investors who wish to gain broad-based exposure to the cybersecurity space can consider investing in the PureFunds ISE Cyber Security ETF (HACK). HACK has a portfolio of 32 stocks and invests ~5% of its holdings in FireEye.

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