Can Activism Turn Around Cybersecurity?

Hacks of the Democratic National Committee, Yahoo! (YHOO) and a long list of high-profile victims underscore the growing importance of cybersecurity to government and corporations.

Despite the clear need for online protection, 2016 has been a turbulent year for leading companies like FireEye (FEYE) , Imperva (IMPV) , Fortinet (FTNT) and Check Point Software Technologies  (CHKP) . Activist firms such as Paul Singer's Elliott Management have agitated in some situations.

FireEye CEO Kevin Mandia described some of the issues that the sector is working through.
"What I call the fear uncertainty and doubt spend is now transitioning at the enterprise level into more of a total cost of ownership decision-making," Mandia said, with companies taking a harder look at the funds they have deployed.

The attack against Target  (TGT) in late 2013 heightened awareness, and ensuing campaigns against Home Depot  (HD) and Sony (SNE)   were free advertising for cybersecurity. Venture capital tracking firm CB Insights reports that global cybersecurity funding totaled $2.6 billion in 2014 and nearly $3.8 billion in 2015. Investment is on track to hit $3.1 billion this year.

Competition has greatly increased at a time when corporations are weighing the cybersecurity investments of recent years.

"The macro trend is there are a lot more cybersecurity companies and there are a lot of folks who have bought a lot of point products, and now they are trying to sort out how do we get all of these things to work together how do we integrate them and how do we automate stuff for some cost savings," Mandia explained.

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