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

When Kevin Mandia became CEO of FireEye one year ago, the company was in bad shape.

After jumping to the top of the market with its pioneering sandboxing technology, FireEye was struggling. The company faced increased competition, a faltering channel strategy and a high price point for its offerings.

With those headwinds, Mandia took the reins from then CEO Dave DeWalt.

Mandia had joined FireEye in 2014 after the then security high flyer acquired the company he founded Mandiant Corporation. In a decade as CEO, Mandia had built Mandiant into a $100 million security services powerhouse.

[Related: Q&A: FireEye CEO Mandia On His One-Year Anniversary, Partner Milestones And Work That's Left To Do]

FireEye's stock was down a whopping 60 percent year over year to $16.05 when Mandia officially took the helm on June 15, 2016. Today – one year to the day that he began his tenure as the new CEO - FireEye's shares closed down for the day 18 cents to $14.99.

At the time of his appointment, Mandia said he wanted to usher in the "next generation" of FireEye, with a roadmap for innovation and partnerships to take the company beyond its on-premise sandbox appliance roots to what he called a "hybrid everywhere security company."

"We are on that journey and that started Day 1 for me," Mandia said in a recent interview with CRN. "The minute I got to the helm, it was about innovating out of the sandbox into a real security company."

That evolution took place in two parts. On the innovation front, Mandia championed a vision at FireEye that included separating data analysis from the appliance itself – a process it called MVX separation –, endpoint security, and an integrated platform approach that the company now calls Helix.

FireEye also needed to repair its broken relationship with the channel, which stemmed from confusion around services competition from the Mandiant acquisition. Partners at the time complained about an unclear delineation between solution provider and direct sales.

Mandia responded quickly hiring a new head of worldwide sales – Bill Robbins- who made changes to how FireEye works with partners, including creating clear swim lanes, a new pricing structure, and plans for channel-ready products.

Mandia, meanwhile, made it known in no uncertain terms that there needed to be clear rules of engagement with regard to where direct sales plays and where the channel plays.

"When I became CEO, it was clear we had to tell our partners the lanes… We hadn't done the work to have a policy that was unambiguous. Now, we have done that," Mandia said.

"Anecdotally, I feel like it's getting better from a channel perspective," he said. "It can't be as bad as where it was… I think it will take time, but all indications over the last few quarters and every meaningful statistic is moving and trending in the right direction for us… If we stick to it, that process will pay off over time."

Partners and analysts, for their part, said Mandia has made a big impact on the relationships with the channel and the product strategy.

"I have seen a big change in them," Randle Moore, president at Houston-based Set Solutions, said. "I think Kevin has been really excellent for FireEye. He's the right guy at the right time to turn them around, if they will." Moore credited a lot of the changes to Mandia, who he said brings a "down to earth" and technical background to the role.

Andrew Nowinski, senior research analyst at Piper Jaffray, said he has seen FireEye make major changes to its product lineup, highlighting the company's MVX separation and Helix platform launch as key examples.

Now, Nowinski said it comes down to execution which he said is helped by Mandia's strength as an operational and technology leader but hindered by a hotly competitive market and challenges breaking outside of FireEye's traditional installed base.

Even with all the changes, partners and analyst said FireEye still faces challenges going forward.

Jane Wright, principal analyst, security at Technology Business Research, said FireEye was the fastest growing security vendor by revenue in the research firm's Security Benchmark in 2014. She said the company is now near the bottom of the list of vendors the firm tracks in terms of revenue growth.

"FireEye is in a difficult position right now," Wright said. "It needs to spend a lot to continue innovating [through] R&D spending and to maintain customer and partner appreciation of its offerings [through] sales and marketing spending. But high spending cuts into profitability, leaving FireEye to continue depending on investor funding rather than generating its own funds for future growth."

Wright said potential opportunities around expanding the Mandiant services portfolio could pose an opportunity for future growth. She also pointed out that rumors about a FireEye aquistions have been generally quieter since Mandia took over as CEO.

One partner, who did not want to be named, said FireEye has "lost some steam" over the past few years. He said the vendor's technology and threat intelligence offerings are strong, but the company needs to get more aggressive with its marketing."They made such a splash and now they're just so quiet," the executive said.

"I still believe in them from a partner perspective," the partner added. "They have good solutions. There's just so much out there [in the security market]."

Set Solutions' Moore said his business with FireEye continues to grow and remains a "really impactful" part of his company's overall business. However, he said he has also seen FireEye struggle as a company over the past few years, particularly around confusing messaging, too many products, and increasing competition

"Without a doubt, they have challenges," Moore said, particularly as other companies jump into the sandbox market. "They certainly have some challenges in the marketplace in terms of differentiating themselves against that and representing the rest of their portfolio."

Mandia, for his part, said FireEye is going to continue investing in its technology, particularly around its Helix security platform. He said that is a strategy that is key for both FireEye and its partners. From there, he said it's all about execution as the company looks to innovate, become profitable, and regain its top notch status in the security market.

"We have Wall Street, we have our channel, and we have our customers. Customers love us – that's the good thing. The channel is getting better. In general, if a company does what it says it's going to do, then Wall Street sentiments improve. That's what we have to keep doing as a company," Mandia said.

"We have to stack wins… I just need more time to make that sentiment permanent," he said. "We just have to do what we say we are going to do, and over time they will see us as a good investment."