Establishing Digital Trust: Don't Sacrifice Security for Convenience
Few security firms have benefited as much from data breaches and insecure business operations as FireEye. With news of a detente in US-China cyber attacks, FireEye's CEO is seeing a slowdown in his own business.
FireEye reported its third quarter fiscal 2015 financial results today, with revenue growing by 45 percent year-over-year to $165.5 million. Yet the company is still losing money, reporting a net loss of $135.5 million or 88 cents per share, up from a loss of $120 million or 83 cents a share in the third quarter of fiscal 2014.
Looking forward, FireEye is providing fourth-quarter guidance for total revenue to be in the range of $182 million to $190 million.
David DeWalt, chairman and CEO of FireEye, boasted during his company's earnings call that FireEye responded to nearly every breach that mattered during the quarter. FireEye's Mandiant incident response division is often called in to deal with high-profile breaches, including the Sony breach and the Anthem health care breach.https://o1.qnsr.com/log/p.gif?;n=203;c=204650394;s=9477;x=7936;f=201801171506010;u=j;z=TIMESTAMP;a=20392931;e=i
The seemingly endless stream of breaches has been good for FireEye's business, but now that's beginning to change.
"After 18 months of elevated -- what I call emergency -- spending on advanced cyber security, we're seeing customers take a more strategic approach to upgrading their security infrastructures," DeWalt said. "It's clear that cyber security remains a top priority for sure for customers and the industry will continue to grow, but I believe we're entering a new phase of the cyber threat cycle."
Nation-state Cyber Attacks
FireEye is now seeing is a return to more normalized overall year-over-year growth rates, DeWalt added. The recent cyber-security deal between the U.S and China also helped lower the anxiety of enterprise consumers. Apparently FireEye is now seeing a marginal decline in nation-state attacks as a result.
"Based on our experience, we're skeptical this lull in nation-state attacks will last, though," DeWalt said. "We've seen this reduction in APT alerts happen before, most recently when Mandiant released the APT1 report in February of 2013. The lull was temporary, and within six months both the volume and sophistication of attacks was greater than ever before."
FireEye's APT1 report was one of the first major security reports to specifically blame the Chinese government for cyberattacks against the U.S.
"We know from our visibility into the threat landscape that the decline in attacks targeting U.S. organizations is offset by an increase in the number of attacks in other regions," DeWalt said. "We also know that the Chinese particularly, as well as many other nations, continue to build out their attack infrastructures and invest in new capabilities."
Fewer 'Oh S**t' Moments
In DeWalt's view the threat landscape is every bit as dangerous as it was before, even though it is evolving. Fundamentally, though, knee-jerk reactions to breaches have been driving the security business forward in recent years. Organizations react as breaches occur, rather than taking a proactive approach.
"In years prior, it was this -- I hate to call it an oh-s**t moment, but it's kind of an oh-s**t moment -- and when it happens, they open up wallets and they change a little bit and the behavior changes," DeWalt said.
Now there is a bit more normalcy and organizations are getting better at cyber-security, DeWalt said.
"Cyber security will continue to grow; I know it will," DeWalt said. "I think there is some change afoot, and we'll see how long that lasts. Maybe it's just 30 days until the next big headline changes it."
Sean Michael Kerner is a senior editor at eSecurityPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.