Secureworks on Wednesday delivered Q1 revenues and earnings that were stronger than Wall Street expected, but the Top 100 MSSP is still losing money as competition from MDR (managed detection and response) companies potentially intensifies.
The twist? Secureworks itself recently launched a new pricing model for its MDR services, CEO Michael R. Cote disclosed during an earnings call today.
But first, here's a look at the company's financials for Q1 fiscal 2019:
- Revenue increased 11.0 percent to $126.2 million from $113.7 million in the same period last year.
- Net loss was $13.8 million in the first quarter of fiscal 2019, slightly more than the $13.3 million net loss in the corresponding quarter last year.
- The annual value of Q1 deals rose 50 percent year-over-year, and the total value of closed deals greater than $1 million increased 94 percent over the first quarter of fiscal 2018, the company indicated.
The revenue and loss figures were better than Wall Street expected, according to SeekingAlpha estimates.
Traditional Managed Security vs Managed Detection and Response Services
Still, the traditional managed security services market faces growing competition from upstart MDR service providers. Gartner expects competition between MSSPs and upstart MDR specialists to intensify as the two markets continue to converge.
Among the key MDR moves MSSP Alert has been tracking:
- ADT acquired DATASHIELD to push deep into MDR in November 2017.
- Cyberint recently raised $18 million for an MDR push.
- eSentire, led by former HP executive Kerry Bailey, has hired talent and continues to differentiate itself from traditional MSSPs.
- Proficio gained funding for MDR expansion in December 2017 and then pushed into Australia.
- Secuvant hired a global SOC manager in November 2016 and additional talent in February 2018 as part of its MDR expansion.
Secureworks Makes MDR Push
Secureworks isn't resting on its its laurels. The company recently launched an MDR offering that "brings together several of our advanced detection and response solutions to form a comprehensive security offering, all in a simply priced package, providing predictability and scalability," Cote asserts.
The offering streamlining the detection and response functions, he adds. The MDR "pinpoints real security threats, lightens the burden of investigation for staff and give clients enough context to timely take the right action to stop and remediate threats," Cote adds.
Although the company didn't disclose its MDR-related revenues during the earnings call, Secureworks' overall monthly recurring revenues (MRR) continues to grow. Indeed, monthly recurring revenue as of May 4, 2018 increased 11.4 percent to $35.5 million from $31.9 million as of May 5, 2017, the company said Wednesday.