Security solution provider FireEye Inc. FEYE recently collaborated with the world’s leading payment technology solution provider Visa Inc. V to develop a joint threat intelligence service. Following the announcement, shares of FireEye gained nearly 3.5% in the after-hours trading session.
In a combined press release, the companies announced that they will work together on developing tools and services to help merchant and card issuers to quickly detect and defend against cyber attacks. The Visa and FireEye Community Threat Intelligence (CTI) offering will especially detect attacks targeting payment data.
Per the agreement, Visa will market and sell the services to retailers and card issuers, especially banks that issue Visa-branded cards (Debit and Credit Cards). On the other hand, FireEye will run a “web-based service to enhance stakeholders’ knowledge of attacks targeting the ecosystem, providing a significant improvement over current industry practices of sharing threat intelligence via e-mail or static documents”.
The demand for cyber security is on the rise and some recent high-profile data breaches including at Target Corp. TGT, Anthem Inc. and The Home Depot Inc. HD have caused much alarm, boosting demand for cyber security products.
Card issuing companies are taking necessary steps to reduce data breaches as their business runs on trust and security. So data breaches may hamper a customer’s faith in the company resulting in customer loss.
The recent collaboration with Visa is not the first one for FireEye. In May, the company formed an alliance with the insurance company, ACE Group, to mitigate cyber attacks. Prior to this, in April, the company partnered with Hewlett-Packard Company to develop offerings for HP Enterprise Services' most strategic clients globally to detect and defend against threats.
We are encouraged by FireEye’s sustained focus on offering industry-leading solutions and go-to-market business model which have been key growth drivers. The company registered 69% year-over-year surge in first-quarter 2015 revenues. Therefore, we believe that FireEye’s recent collaborations will further boost revenues.
Also, we expect the increasing spending on IT security to benefit this cyber security company’s results. Per Gartner, worldwide spending on IT security in 2014 was about $70 billion and is likely to reach $76.9 billion in 2015 and FireEye appears to be well poised to cash in on this opportunity.
Currently, FireEye carries a Zacks Rank #3 (Hold).
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