FireEye looks to further expansion in Canada with new channel solutions, consumption models

FireEye sells almost entirely through the channel, but has recently doubled down on channel enablement with a series of enablement initiatives that cover product, pricing models, and partner compensation.

Chris Carter, FireEye’s Vice President of Channels

Cybersecurity vendor FireEye has a strong presence in the Canadian market. Now, with the assistance of both new channel-focused packaged offerings, and a new subscription-based pricing model, they are looking to enhance that presence.

“Canada is one of our best regions,” said Chris Carter, FireEye’s Vice President of Channels. “We have a good presence there, and our leader in Canada, Greg Davison, is very channel-friendly.”

FireEye has a hybrid go-to-market model, but the large majority of their business goes through partners.

“In Canada, 98 per cent of our business is channel,” Carter said. “The two per cent that is not is a combination of two things: a named list of global customers to whom we reserve the right to sell direct, even though we often sell to them through partners; and customers who have been breached, who call our hotline directly, and who need to deal with us direct because they won’t or can’t allow a third party to be leveraged in that situation.”

FireEye’s channel strategy varies by product set.

“Our networking products tend to be more sophisticated and require a higher level of support, so we use a more focused value channel there,” Carter said. “Our Helix security operations platform also requires more partner expertise, and we don’t see that changing. We do, however, have products in the midmarket for endpoint and our email solution that can be sold by partners with more limited security experience.”

The channel in Canada overall is relatively select.

“We have less than 30 partners in Canada,” Carter said. “Insight, CDW and Softchoice are focused on endpoint and email, and mainly on smaller customers and a more transactional business. Our value channel is also working very well there for us, supporting very large customers and adding tremendous value. Ingram Micro and Westcon are our distribution in Canada, and both do a very good job for us there.”

Carter, who has been at FireEye for five years, said that over the last two, the company has been remaking its product set to make it more channel-friendly.

“We have been revamping products and developing new ones which are channel-oriented from both a packaging and pricing standpoint,” he said. “The last batch of these we announced at RSA, which target the midmarket. These will be instrumental in business development in Canada.”

A key element of this strategy has been making FireEye’s solutions more accessible to smaller organizations with more limited budgets than FireEye’s core enterprise market, both by lowering acquisition costs and by making it easier to quote and consume the products. At RSA this year, FireEye launched three new product-focused subscription-based consumption solutions – FireEye Endpoint Security, FireEye Network Security and FireEye Email Security. They also launched a comprehensive FireEye Security Suite.

“These solutions will improve partners’ ability to sell us into the midmarket,” Carter indicated. “They all use our Helix platform, which links to our intelligence data, and presents that data to the customer or the partner in a user-friendly format. It provides a lot more context around alerts, and enables the partner to become a more strategic provider to their customer. These are significant strides in product and packaging, which make these solutions now fully ready for the channel.”

Carter said the products are also being packaged for the managed services market.

“Our traditional partners extending their business into managed services has been a big trend, so we have been building APIs into products that will let them connect our products into our management infrastructure,” he stated. “Helix, in the near future, will be positioned as a platform for managed services.”

Carter also stressed that the addition of the user-based consumption-based pricing model will also be a major win for the channel

“These suites simplify quoting and consumption on the end user side,” Carter said. “It’s also per user-based pricing. In the past, pricing was either capacity or device-based, which was much more complicated.

“We have had the subscription-based consumption model for several years, specifically around our cloud-based solutions,” Carter added. “What we are doing now that’s new and different is expanding the number of options that are subscription-based, including networking. We have also changed the way in which we license the appliance component. Before, the software and subscription that came with it were bundled in. Now we have restructured it so the customer can buy our subscription component separately, at a lower cost than before, or as a VM implementation. The subscription that they buy will cover them regardless of how they want to use it, although with the appliance they will still have to buy the hardware. It gives the customer much more flexibility in how they consume and deploy our products.”

Carter said that FireEye has also recently improved their partner program and increased the margin opportunity for partners.

“If a partner brings us an opportunity, we have significantly increased the margin opportunity for them,” he said. “We also changed the base discounts in program to provide additional protection to that partner.”

Back-end rebates for Platinum and Gold partners were also announced and implemented.

“These partners also now have an opportunity for additional margin if they reach the target we mutually agreed on during the business planning process,” Carter noted.

He also highlighted new additions to the FireEye rewards program.

“We allow the sales rep of the partner to earn spiff incentives by registering a new opportunity, and we pay additional incents when it closes, to both the sales rep and the partner sales engineer who was engaged in the opportunity. We believe the SEs pay a big role in selling our products them as well as the salespeople with our FireEye rewards.”

Carter said that it all adds up to a much better scenario for FireEye’s channel.

“The opportunity for the partner has improved significantly,” he said.