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FireEye Looks To Revamp Pricing, Go-To-Market Strategy With Partners

FireEye is entering the second phase of its company transformation and will use partners to help it reach a broader set of customers.

FireEye is entering the second phase of its company transformation, looking to revamp its pricing and go-to-market strategy to appeal to a broader set of customers.

Over the past year, the Milpitas, Calif.-based company has focused on innovation, rolling out its new Helix security platform and readying its next-generation endpoint security offering HX for prime time. Now, FireEye CEO Kevin Mandia said on the company's second quarter earnings call Tuesday that the firm is working on its go-to-market strategy.

FireEye wants to position itself as something more than an appliance company; it wants to be known as a full security platform company with a hub and spoke model. Also, it wants to simplify its pricing and packaging, and to continue to build channel leverage and new customer momentum, Mandia said.

[Related: One Year Of Kevin Mandia: Partners Say FireEye Is Evolving Under New CEO, But Still Has Work To Do]

The timing for these updates is key, Mandia said, as FireEye looks to deliver the remaining pieces of its HX endpoint protection platform, continue its growth with partners, and drive its Helix platform to more customers. He said the coming quarter is a "pivotal moment for FireEye."

Mandia said FireEye would be looking to undergo a holistic pricing review over the next 11 to 12 weeks, working both with external consultants and inside employees. He said new channel pricing and training is already starting to be rolled out. He hopes that will allow the company to expand beyond its traditional base of large, mature enterprises with a premium price point to a broader set of companies and even into the midmarket and SMB.

"In the past, I thought our products at a premium price weren't always for the channel … If we enforce it, we will win the channel over time," Mandia said.

Mandia said FireEye is aiming to be more consistent with its product messaging and pricing, including branding, solution packaging, and policies with partners. "We can simplify our messaging and simplify our go-to-market and give our channel better tools and simpler products to sell," Mandia said.

The comments come after a second strong quarter for FireEye, which has historically struggled in earnings. FireEye posted second quarter sales of $185.5 million, up 6 percent year over year, and billings of $172 million, down 12 percent, but near the high point of the company's guidance range for the quarter. Net loss for the quarter was $70.7 million, down from $139.3 million in the same quarter last year.


"We did what we said we would do," Mandia said of the earnings.

CFO Frank Verdecanna said the billings growth was driven by a NX refresh migration opportunity as well as "strong growth" in the company's Mandiant consulting business, which saw a 19 percent jump in sales to $33.7 million. He said the company's Helix security platform, launched at the end of last quarter, signed on 10 new customers in the quarter.

Verdecanna said FireEye also continued to reduce its operating margin losses, reducing its operating margin by $100 million over the same quarter last year. He said the changes show FireEye's continued emphasis on improved operational efficiency as it looks to hit profitability.

Mandia said FireEye's priorities include continuing to build on the company's intellectual property and updating its products. He said partners and analysts can expect new updates every quarter to its products.

FireEye said it expects third quarter sales between $183 million and $189 million and billings between $190 million and $205 million. It expects a positive cash flow of $1 million to $10 million.

For the full year, FireEye said it expects to post sales between $734 million and $746 million and billings between $745 million and $775 million. It expects net loss per share to be between $0.19 and $0.24.

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