Fear Shouldn't Be the Fuel for Security Industry Growth
NEWS ANALYSIS: FireEye's CEO blames a slowdown in business on the China-U.S. cyber-security detente. Is he right, and what are the implications of this?Why do companies buy security technology? It seems like a harmless enough question, and the obvious answer would seem to be that companies buy security technology to protect themselves and their users. But the larger question of when companies buy security technology is tougher to answer. This week, security vendor FireEye reported its third-quarter fiscal 2015 earnings and during a follow-up conference call with the financial community, CEO Dave DeWalt provided interesting insight into what motivates buyers. Part of FireEye's business comes from its Mandiant incident-response division, which has been involved in some of the biggest breaches in recent memory, including those at Sony and Anthem. Apparently, there has been a bit of a slowdown in breaches lately, and that's leading to a slowdown in security orders for FireEye. "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 during his company's earnings call. "In years prior, it was this—I hate to call it an [oh, no] moment, but it's kind of an [oh, no] moment—and when it happens, they [customers] open up wallets and they change a little bit and the behavior changes."
Basically, DeWalt is saying that organizations have been reacting to threats after they have been disclosed and reported in the media.