FireEye to focus on mid-market after $139m Q2 loss

Security vendor announces job cuts following $139m losses in Q2

FireEye plans to focus more on the mid-market after announcing a loss for Q2 this year.

The security vendor hit losses of $139m (£106m) before tax for the three months ending 30 June, a 4.8 per cent increase in losses compared with the same period last year.

Total revenue, however, was up 19 per cent to $175m.

The losses have triggered a restructuring of the business that will see around nine per cent of its 3,400 employees laid off in an effort to cut costs by $20m this year.

As part of this restructuring CEO Kevin Mandia announced new cloud-based products that he said will help FireEye crack the mid-market.

Barrie Desmond, chief operating officer at FireEye distributor Exclusive Networks, told CRN that this is the right way to go for FireEye.

"They need to break out of the elephant deals at the enterprises and move more into the mid-tier/SMB play," he said.

"It's sad news in some respects that they've had to stop, pause for breath and say 'we need to realign our business', but also from a channel perspective I see it as an opportunity for them and us.

"I see this as an opportunity for them to lever the channel more and to get a bigger return on investment, because the cost of sale is less and the scale is much bigger. This is where the channel should stand up and deliver that growth."

Mandia said on a conference call that the cloud-based products will allow FireEye to "reach smaller, more price-sensitive customers" which will open up new markets for the vendor.

He added that the products will also benefit channel partners.

"These initiatives can also help our channel partners. We believe that by broadening our threat coverage and offering competitively priced cloud-based solutions, our products become better suited to distribution through our reseller channels and our channel partners can play an important role introducing our new solutions and expanding our customer base", he said.