10 Ways FishNet's New CEO Plans To Capture The Security Market

FishNet CEO Fennessy: Services Will Drive Growth

FishNet Security CEO Rich Fennessy told CRN that the company is firing on all cylinders in its effort to meet its goal of reaching $1 billion in revenue over the next several years. Fennessy, who took over as FishNet CEO on Nov. 11, replaced Gary Fish, who said he is retiring after 17 years at the helm of the $700 million solution provider.

FishNet faces stiff competition from Accuvant, Forsythe Technology, Deloitte, Verizon Business and others that offer clients a mixture of security consulting services, technology deployment assistance and managed services. FishNet is the largest in the space, but the market share is in the single digits, Fennessy said.

Here are 10 ways Fennessy said he plans to help grow the business.

People At Core Of Growth

Fennessy said the company had its first all-hands conference call with all 700 employees across the U.S. to discuss the transition and introduce himself to the company. FishNet has been a very successful company. Over its 17 years, it has grown significantly and built some great specialization in the marketplace, Fennessy said.

The first strategy is to continue what the team has been doing, Fennessy said. The company will expand its sales team geographically, he said, to make sure the company is in all the major marketplaces.

"At the heart of this business is the people," Fennessy said. "When you are in the reselling business and you are building out services capabilities, it really is all about the people."

Gary Fish To Remain Involved

Under the transition plan, founder Gary Fish (pictured) will move to chairman of the board and will be very involved from a board perspective, Fennessy said. Fish will continue to provide support over the next several months while Fennessy gets up to speed on the security industry.

As FishNet considers its strategy and direction, future mergers and acquisition activity and typical board related topics, Fish will be involved in those discussions in his capacity as chairman of the board. FishNet is in a good position, Fennessy said. The goal is to execute on the company's strategy to focus on expanding services, adding technology solutions and building out the sales team's global footprint.

It's All About Services

Over half of FishNet's employees are in its services organization today, Fennessy said. The company had about 2,000 customer engagements. The company will continue to expand its services capabilities and strengthen the overall FishNet experience, Fennessy said.

There are 10 different practice areas, including a very robust managed services business that has grown more than 500 percent in 2013, Fennessy said. The services business will be a big part of the road map necessary to hitting the $1 billion revenue goal by 2017. The company's mobility practice is also very strong right now, Fennessy said. Mobile device management and securing the increasingly mobile workforce are top concerns for many firms.

Security Solution Provider Partnerships

FishNet has partnerships with about 100 different vendors. The company is continually evaluating new technologies so it has what customers are asking for, Fennessy said. The list is fluid and will expand over time as it makes sense, Fennessy said. FishNet will continue the specialization it has and never have a partner list in the multiple thousands, he said. Specialization in security and network infrastructure is where the company will remain.

"Today we have a very rich line set with the partners that we represent," Fennessy said. "There will be no radical change in terms of significantly adding to the list; we'll add a few based on new technologies specifically in the emerging technology space."

Federal A Top Vertical

FishNet has security operations centers located in Kansas City, Kan., and Atlanta. Competitors also have strong security operations. Accuvant opened a SOC in the Baltimore-Washington corridor as part of a strategy to grow its Federal business.

Fennessy said he recently sat in on a federal business review. There is a very significant opportunity in federal over time, he said. There have been hurdles in 2013 for all providers related to the government shutdown and increased scrutiny on security clearances following the Navy Yard and National Security Agency leaks. But FishNet has all the clearances that it needs to be very competitive in that space, and it plans to continue to grow that business, Fennessy said. A dedicated sales team and separate group of activities is part of that business unit, he said.

Grow Market Share In Fragmented Segment

When IT security and chief information security officers look to acquire security based services or technology, there are a lot of choices in the marketplace, Fennessy said. The market for delivering technology and IT services has had a lot of consolidation, bringing together those capabilities into larger organizations, he said. "If you look at the classic competitors we compete against, our view is that we're the largest today in that current space, but our market share is still in single digits," Fennessy said. "This is a marketplace where there are a lot of players, a lot of opportunity to play and a lot of opportunity to growth the business."

The growth characteristics of this segment of the marketplace have consistently been attractive, he said. The security marketplace is hot, Fennessy said, and that attracted him to FishNet. Fortunately FishNet has been able to grow the business through the downturn in 2008 and 2009, Fennessy said.

Targeted Acquisitions Will Help FishNet Grow Geographically

FishNet has 29 offices in the U.S. and an office in London. Plans are in the works to continue to expand that organically as well as through acquisitions, Fennessy said. Acquisitions are clearly part of the strategy as it makes sense, he said.

The recent TorreyPoint acquisition helps FishNet add skilled experts on the network infrastructure side. TorreyPoint leadership is not moving over the company, but the bulk of the company's employees are currently undergoing FishNet orientation, Fennessy said.

Organic Growth A Big Priority

Acquisitions help bring on new capabilities, and resources or sales teams will allow FishNet to fuel growth in certain regions where FishNet is not the top provider, Fennessy said. FishNet will also look at acquisition as a strategy to bring on new customers, he said.

But an even bigger part of the company's strategy will be to drive organic growth. The lion's share of the growth the company has experienced has been purely organic growth and that is what the company wants to continue to experience, Fennessy said. It has been a strong part of the company's history. Over 17 years, FishNet has had only 6 acquisitions.

IPO Not Ruled Out

FishNet was acquired by Investcorp in November 2012, and Fennessy said he would not rule out seizing a future opportunity to take the company public. FishNet doesn't need an IPO to raise cash for acquisitions, Fennessy said. Investcorp put FishNet in a strong cash position in its operations, as well as in its ability to make investments required to grow the business, he said.

"If you look out toward the future, IPO is clearly one of the options we will pursue or look at as well as other options," Fennessy said. "Right now, none of it is in the short-term plans; these are just other opportunities down the road as we continue to grow and expand the business."

Apply IBM Principles To FishNet Model

Fennessy spent 17 years at IBM and said he had a chance to move up through the executive ranks and the opportunity to run several business units there. Some of the experience and training at IBM can be applied to FishNet, he said. IBM places an importance on operational efficiencies, business process improvements and a priority on strategy and planning, Fennessy said.

"As a general manager, I wasn't just running the day-to-day business, but I was also thinking about where the business needs to go, anticipating the market trends and making sure that the business was ready to capitalize on those," Fennessy said. "I still consider myself an IBMer; a lot of the management philosophy, processes and principles I learned there I still use today."