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Sourcefire, Inc (FIRE)

UBS Global Technology Conference

November 15, 2012, 2:00 pm ET


Todd Headley – CFO

(Mark Solomon) - CMO



Unidentified Corporate Participant

Our presenter is Sourcefire. I think many of you who follow the company you see a story that's really disrupting the security landscape in a pretty big, big way moving from IPS and the next generation firewall, which (has) significantly (broadened) their (tam).

And I think Todd and (Mark) will talk about this. Todd Headley, CFO, has been with the company for a long time, April 2003. Is that correct?

Todd Headley

Almost 10 years.

Unidentified Corporate Participant

And (Mark Solomon), CMO, (Mark) is going to be able to talk I think a little bit about the positioning and product line, help us put into perspective what's really going on. So thanks for joining us.

(Mark Solomon)

Thank you.

Todd Headley

Well, thanks for inviting us.


Unidentified Corporate Participant

I guess maybe the big question on everyone's mind has just been this expansion. You've had an amazing run in your core (Mark)et and now you've really laid a strategy to move outside and redraw the boundary and it seems like you're getting some really good signs of success (inaudible) MVP as a security earning season given your performance. So you're good at that relative to some of the other companies.

What – just help us. Bring us up to speed on where you're at right now.

Todd Headley

Well, I appreciate you saying that. Sourcefire has been a disruptor in the security industry for as long as I've been here, which is almost 10 years now. And we've been a disruptor because of the level of innovation that we've brought to the equation.

And if you looked at security today, the dynamics really set up well for Sourcfire. Networks are getting a heck of a lot more complicated. And then if you look at the bad guy side of the equation, there are nation states, there's organized crime, there are well paid hackers who are looking for any nook or cranny or crack or crevice to get into a network and exploit it for the digital assets that are just sitting there.

And if you look at the Verizon breech study, there were I believe 855 breeches last year that they looked at. And in 97% of the cases, the actual compromise was not that sophisticated.

So the bad guys actually don't have to work that hard, unfortunately, to break into the networks. So for us, the dynamics set up really well and we think in the security industry you've got to innovate.

You've got to bring true solutions to your customers that work as advertised and I think we have a history of doing that and I think our results for the last few quarters speak to that opportunity and that is we're doing a great job doing competitive replacements relative to the competition and with regard to the incremental capabilities and solutions we've brought to the (Mark)et in terms of next generation firewall and advanced malware protection.

Those are starting to build and resonate and really set us up for the future.

Unidentified Corporate Participant

Maybe if we can talk a little bit about both (NGSW) and its advanced protection, there were a lot of critics that said you were crazy to take on a bunch of elephants after you were a star in your IPS (Mark)et.

You've taken that on. You're already starting to show some signs of success. I don't know if there's an analogy you could put, whether it's we're singing the national anthem, we're in the second innings. Where are you at? You mentioned a couple big wins in (NGSW) but it's still early, right.

Todd Headley

It's still early days. I'm going to pitch it over to (Mark) because he's really smart on the product stuff and I’m the numbers guy. I can frame it this way. The next generation firewall (Mark)et is really the natural evolution of the path that we've been on.

I think when we announced the fact that we were getting in the next generation firewall (Mark)et, people really focused on the firewall word and said, well gee, how can Sourcefire do that?

If you look fundamentally at what a next generation firewall does, it's, like I said, right in our organic roadmap that we've been executing on for a while and we've brought innovation to bear there.

While others on the outside thought, wow, this is a huge sea change for the company, I'll remind them that back in 2004 Gartner had declared intrusion detections systems dead and that was principally what Sourcefire did.

And I remember walking in the office that day to a bunch of long faces and I said what's going on? And they said, well, Gartner's declared what we do irrelevant. And I said, well, are they right? And they said, well, not exactly.

But everything then was about IPS and there were some vendors that emerged onto the scene that were very focused on IPS that got to (Mark)et first from the standpoint of attention, awareness and all of those things.

But as you can see, we were an IPS company. We did a little bit of coding behind the four walls there and came out with a very compelling innovative IPS solution and, over time, it's been extremely disruptive.

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