David DeWalt proclaimed Tuesday that antivirus software he helped lead to prominence is no longer protecting consumers from cyberattacks, a change that has helped his current company FireEye grow at a speedy clip.
"Everything the consumer once took for granted while shopping online has become more risky," DeWalt said in an interview with this newspaper Tuesday, explaining that the antivirus model prevalent on many personal computers now detects less than 20 percent of attacks, giving typical Web users "less and less capability to protect themselves."
DeWalt, former CEO of McAfee, said that is why he accepted the CEO position at FireEye, a Milpitas enterprise security company that seeks to detect attempted incursions and snuff them out on a larger scale.
"Large corporations, particularly large retailers and financial-services firms, are getting breached at unprecedented levels, some of which have hit the media but most of which have not," he explained, later adding, "My goal here is to attack directly the antivirus market in all its areas it does business today, because it's just an inferior model."
DeWalt's view of the security situation was bolstered even as he spoke, with the New York Times reporting that Russian hackers had amassed the largest known collection of stolen information from Web users.
FireEye has taken advantage of its early-adopter position to post sales growth that DeWalt says makes it the fastest growing security company in the world, which continued with second-quarter numbers released Tuesday. The company reported a loss of $116.8 million, or 82 cents a share, on sales of $94.5 million, producing year-over-year sales growth of 184 percent. The company brought on a new head of sales, John McGee from Informatica, in hopes of continuing that growth.
The company has been under fire from investors for a rapid series of big moves in 2014, including the $1 billion acquisition of Mandiant in January and a secondary stock offering in March that pulled in $1 billion by selling shares at more than four times the IPO price. When the company announced in-line numbers and yet another acquisition in May, an already declining stock price dropped even faster as investors revolted against the rapidly changing company, chopping off more than half of FireEye's market valuation.
"You could almost write a novel about what happened at FireEye from Jan. 1 to early May," FBR Capital Markets analyst Daniel Ives said Tuesday, "and it would be a novel that some investors would put in the horror section."
Ives said investors will like FireEye's second-quarter results after the maelstrom of news in the first half of the year, but will be waiting to see the results of all that action in the second half.
"It was a solid quarter, a rebound from what we saw last quarter, but investors are going to continue to view this with a glass-half-empty view until DeWalt continues to show that hypergrowth through the second half and into 2015," the analyst predicted.
FireEye raised its revenue forecast for the current quarter as well as the full year, and DeWalt said a variety of new products from the combination of FireEye and Mandiant will launch in the second half, beginning with a major platform debut in September.
"They're using cloud architectures, leveraging global threat intelligence in ways the industry has never seen before," DeWalt said. "These are things that Mandiant and FireEye will do together, and will yield some really interesting new innovation."
He added that distaste for the company's big moves would not change his tactics.
"We're going to be continue to be very aggressive trying to win," he said. "We're going to continue to do acquisitions, we're going to continue to have new products, and we want to continue to grow at the pace that we are."
FireEye shares gained 1.6 percent to $34.75 in Tuesday's session, and were trading at the same price two hours into late trading.