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FireEye Sets Its Business Target through Channel Partners


Sep. 28 2018, Updated 10:31 a.m. ET

Does the target look achievable?

FireEye’s (FEYE) channel sales seem to be picking up momentum driven by the different strategy the company has deployed to boost its business. It has set a target of sourcing nearly 33% of its deals from its channel partners in 2018. At the end of the second quarter, the company believed that it was well on its way to accomplishing its 2018 channel sales goal.

Strong performances from FireEye’s channel partners are driving cross-selling and multiproduct adoption across different enterprises, such as Vodafone (VOD) and Canada-based mining company Teck (TECK).

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To drive its channel business, FireEye is following a strict policy whereby any service- or product-related contract should pass through its channel partners unless it’s directly coming from services. The company is also investing in its sales and marketing department to provide all kinds of support to its channel partners.

In the graph above, we can see the growth in FireEye’s sales and marketing costs over the last five quarters. During the period, it increased at a CAGR (compound annual growth rate) of 1.9%.

Steps were taken to boost channel business

FireEye has undertaken a few measures to accelerate its channel sales. The company has streamlined its pricing policy by adopting usage-based pricing for its products and services. Subscribers are charged by the number of endpoints or emails they are using. The company’s move has provided customers with more flexibility to use its products.

FireEye has also set out strict rules for sales representatives who are providing support to channel partners. Any business generated from the channel should fall under channel sales and not be assigned to a direct sales team. If representatives are found to have broken the rules, they will be charged with a penalty.

FireEye has taken an aggressive step in signing up more than 1,000 different channel partners. The company is now targeting channel partners separately in each region by offering proper training. It’s also offering better margins to those partners who can strike better deals.


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