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How FireEye May Benefit from Its New Business Model

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How a business model shift could drive growth

FireEye (FEYE) has continued implementing a different business strategy to boost customer growth. The company is focusing more on a subscription-based business model than its traditional one-time payment model, to tap the mid-level market, offer flexibility to clients, drive product sales, and retain customers, thereby supporting its annual recurring revenue.

FireEye enjoys a strong product portfolio, with popular products such as its iSIGHT intelligence technology, Helix user interface, and Endpoint 4.0 security service. Growing demand for FireEye’s security offerings is driving its domestic and international business.

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Driving customer growth

In the last five years, FireEye’s customer base has grown at a compound annual rate of 34.8%. As shown in the graph above, FireEye has maintained steady customer growth for the last five years. The company exited fiscal Q1 2018 with more than 6,830 customers, and ~45% of its customer base comprises Forbes Global 2000 companies.

The company’s intelligence-based product features are a key component in attracting customers. Moreover, the company’s strategic alliance with Oracle (ORCL) may allow FireEye to make its security products available on the cloud, offering more flexibility to clients.

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