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A look at FireEye's Mandiant buy: Game changer or not?

FireEye needs to quickly meld malware mitigation with threat detection and forensic technology then gain customer acceptance

By , Network World
January 06, 2014 03:58 PM ET

Network World - FireEye's acquisition of Mandiant is getting generally positive reviews from industry analysts, though some caution that FireEye faces a big challenge in its goals related to blending the two security firms' products.

In announcing the $1 billion cash-stock deal last week to acquire Mandiant, FireEye indicated its intent to further integrate its virtual machine execution engine used to dynamically detect zero-day malware threats with Mandiant’s endpoint software for threat detection, response and forensics. FireEye had already done some work in this direction with Mandiant as a partner, just as it also has Bit9, Blue Coat’s Solera and Guidance Software as partners.

But now that FireEye has bought Mandiant outright, FireEye now becomes a “much more formidable company” because it gains an endpoint platform, plus additional security intelligence to augment FireEye’s own, says Jon Oltsik, senior principal analyst at Enterprise Strategy Group. Oltsik goes so far as to call the FireEye/Mandiant merger is a “game-changer.”

+ More on Network World:  FireEye snaps up cyber forensics firm Mandiant in 1 billion cash-stock deal | When Boomers say bye-bye +

But other industry observers, including Gartner research director in network security products, Lawrence Orans, and Richard Stiennon, senior research analyst at IT-Harvest, are somewhat less sanguine about it all.

There’s no denying there’s plenty of “synergy” between FireEye and Mandiant, says Orans. He notes there’s virtually no product overlap between FireEye’s sandboxing technology for payload detection, which an estimated 30% of FireEye customer deploy in-line for blocking purposes, and Mandiant’s endpoint incident response and forensics capabilities. But he points out that FireEye still faces the huge challenge of trying to get customers to adopt yet another endpoint agent, something that network security vendors have often found to be a very difficult thing to accomplish.

Stiennon says “the trouble with blending the products is that it may limit options for customers. Today customers can purchase Guidance Software or Bit9 (or Mandiant) endpoint products to help track down indicators of compromise. It is hard to give preferential treatment to your own solution while still maintaining partner relationships.”

Mandiant, which disclosed it earns about half of its annual income through services, is often called in after a data breach by attackers has occurred, and its expertise lies in determining the extent of the impact and tracking down the attackers. Mandiant has many competitors in terms of regional service firms that can respond to breaches, Stiennon says. Mandiant’s merger into FireEye could mean increased competition to hire the skilled analysts needed to do this kind of work.

Stiennon regards the $1 billion valuation assigned to Mandiant in the stock-cash deal with FireEye as excessive. He suggests Wall Street may be losing perspective on just how small FireEye, which had a successful IPO last September, is in relation to other players in the network security industry.

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