WEBVTT 1 00:00:00.330 --> 00:00:02.010 Michael Novinson: Hello, this is Michael Novinson with 2 00:00:02.040 --> 00:00:04.980 Information Security Media Group. I'm joined today by 3 00:00:04.980 --> 00:00:09.360 Mimecast CEO Peter Bauer to take a look back at 2022, as well as 4 00:00:09.360 --> 00:00:12.570 the look ahead to 2023. Good afternoon, Peter, how are you? 5 00:00:13.259 --> 00:00:14.879 Peter Bauer: Good, Michael, thanks for having me. 6 00:00:14.000 --> 00:00:16.440 Michael Novinson: You're very welcome. One of the major 7 00:00:16.506 --> 00:00:20.594 milestones for Mimecast in 2022 was being acquired by Permira, 8 00:00:20.660 --> 00:00:24.749 back in May, for $5.8 billion. So at this point, a little over 9 00:00:24.815 --> 00:00:28.376 six months, since that acquisition was complete. I was 10 00:00:28.442 --> 00:00:32.267 wondering what that meant for the company being in private 11 00:00:32.333 --> 00:00:35.763 hands in general, and then specifically being having 12 00:00:35.829 --> 00:00:37.280 Permira's stewardship. 13 00:00:37.970 --> 00:00:39.890 Peter Bauer: Yeah, great question, Michael! It's 14 00:00:39.890 --> 00:00:43.700 something that I don't think we could have timed better, just in 15 00:00:43.700 --> 00:00:47.540 terms of an opportunity for a growing company like ours to 16 00:00:48.380 --> 00:00:51.620 avoid some of the turmoil of being in the public market. So, 17 00:00:52.040 --> 00:00:54.770 we agreed the deal, I think, because we announced it in 18 00:00:54.770 --> 00:01:01.550 December 2021. It closed in May of 2022. And that's really 19 00:01:01.550 --> 00:01:04.250 allowed us just rather than to be distracted by any of the 20 00:01:04.280 --> 00:01:07.850 public market things, really to focus on investing in the 21 00:01:07.850 --> 00:01:11.360 business, continuing to build our team, continuing to build 22 00:01:11.360 --> 00:01:15.020 exciting new technologies. And then also invest in some product 23 00:01:15.020 --> 00:01:19.250 and technology developments that have longer life cycles, that 24 00:01:19.250 --> 00:01:21.680 perhaps as a public company, we might have been a little bit 25 00:01:21.680 --> 00:01:25.190 less bold in terms of really leaning into. We've had a great 26 00:01:25.190 --> 00:01:29.180 opportunity during 2022, to invest in those things, and 27 00:01:29.180 --> 00:01:32.720 start talking to your customers and prospects and the market 28 00:01:32.720 --> 00:01:34.730 about them on the tail end of this year. 29 00:01:36.190 --> 00:01:38.260 Michael Novinson: Of course, and specifically in terms of 30 00:01:38.290 --> 00:01:41.800 Permira, I know, they also own McAfee and they have some good 31 00:01:41.830 --> 00:01:47.680 DNA in this space. How has their involvement impacted Mimecast 32 00:01:47.680 --> 00:01:48.430 and your strategy? 33 00:01:49.740 --> 00:01:54.360 Peter Bauer: Yeah. So, you know, we met, obviously, you don't 34 00:01:54.360 --> 00:01:57.660 exactly get to choose who acquires your company, when 35 00:01:57.660 --> 00:02:01.230 you're a public company, or probably have some influence or 36 00:02:01.230 --> 00:02:06.930 some perspective over it. And we'd met with a number of 37 00:02:06.960 --> 00:02:10.380 parties that had expressed interest in us, and particularly 38 00:02:10.380 --> 00:02:14.460 since Proofpoint got acquired, you probably remember that we 39 00:02:14.460 --> 00:02:18.840 had a lot of interest. So when we were meeting with various 40 00:02:18.840 --> 00:02:21.360 parties, we got a sense of the sort of the similarities and the 41 00:02:21.360 --> 00:02:24.660 differences in approach. Permira was very clear that they had a 42 00:02:24.660 --> 00:02:30.690 product first and growth first mantra. And we really liked 43 00:02:30.690 --> 00:02:33.120 their approach. They're thinking about businesses aligned with 44 00:02:33.120 --> 00:02:36.870 our values. Now you say product first growth first, at the end 45 00:02:36.870 --> 00:02:39.270 of the day, these are people businesses, and we felt a real 46 00:02:39.270 --> 00:02:42.480 sense of empathy, and a real sense of value that they placed 47 00:02:42.480 --> 00:02:47.490 on talent and Mimecast as a talent destination. And so from 48 00:02:47.490 --> 00:02:51.690 that meeting, which was during 2021, and the way this all 49 00:02:51.690 --> 00:02:56.100 played out to ultimately the board not failed is agreeing an 50 00:02:56.100 --> 00:03:00.840 acquisition by Permira through to the deal closing in May, and 51 00:03:00.840 --> 00:03:04.890 all of our time, so far together with them. It's been a very 52 00:03:04.920 --> 00:03:07.950 positive and very consistent experience with some of those 53 00:03:07.980 --> 00:03:11.220 early signals that we were really encouraged to see in our 54 00:03:11.220 --> 00:03:14.760 meeting with them. And that's allowed us to continue to focus 55 00:03:14.760 --> 00:03:17.640 on the business. And they brought a lot of expertise, they 56 00:03:17.640 --> 00:03:23.700 brought a lot of brain power to the business. And I would say I 57 00:03:23.700 --> 00:03:25.950 don't want to put a number on it, but maybe our IQ as a 58 00:03:25.950 --> 00:03:29.640 company internally has gone up by 10 points, just through the 59 00:03:29.640 --> 00:03:33.240 time we've spent with them. And through some of the initiatives 60 00:03:33.240 --> 00:03:34.950 that we've been crafting together with them. 61 00:03:36.330 --> 00:03:37.110 Michael Novinson: Very interesting. In terms of things 62 00:03:37.110 --> 00:03:38.610 that have happened since the acquisition by Permira at back 63 00:03:38.610 --> 00:03:39.870 in August, you debuted the X1 platform bringing events email 64 00:03:39.870 --> 00:03:41.100 security and collaboration together. And now it's been 65 00:03:41.130 --> 00:03:47.460 nearly four months since the debut of that. What's the impact 66 00:03:48.120 --> 00:03:57.240 then for both existing customers as well as prospects of X1? 67 00:03:55.530 --> 00:03:59.310 Peter Bauer: Yeah, great question. So just to provide 68 00:03:59.310 --> 00:04:05.760 some context here, we built the business, we built the company 69 00:04:05.760 --> 00:04:08.610 on an underlying technology philosophy. And I know you, 70 00:04:08.640 --> 00:04:11.700 Michael, you and I've discussed this going back a little bit. 71 00:04:11.730 --> 00:04:15.420 And our underlying technology philosophy was really around the 72 00:04:15.420 --> 00:04:19.350 idea that we were back in 2003, when we founded the company, we 73 00:04:19.350 --> 00:04:23.010 created a cloud first platform, which was novel at the time, 74 00:04:23.070 --> 00:04:26.370 nobody used the term cloud, but it was a multi-tenant, 75 00:04:26.640 --> 00:04:30.780 multi-product suite built on sort of microservices type 76 00:04:30.780 --> 00:04:35.940 concepts. And the approach that we put a name to that at a point 77 00:04:35.940 --> 00:04:38.880 in time, we call that Mime OS, which was our SaaS operating 78 00:04:38.880 --> 00:04:43.560 system. And really, that took us quite far. But what we found was 79 00:04:43.560 --> 00:04:45.630 that there were certain limitations there were certain 80 00:04:45.630 --> 00:04:50.160 kinds of designs around Mime OS that weren't going to take us 81 00:04:50.490 --> 00:04:55.800 fully into the future. And so we recast Mime OS with a few new 82 00:04:55.800 --> 00:05:00.630 characteristics, we recast that as the X1 platform. And that has 83 00:05:00.660 --> 00:05:04.140 involved building some new technology components and new 84 00:05:04.140 --> 00:05:08.310 capabilities into the platform like an extensive data platform 85 00:05:08.520 --> 00:05:11.340 to handle the vast amounts of telemetry that we get and turn 86 00:05:11.340 --> 00:05:15.960 that into security intelligence for customers. It's involved 87 00:05:15.960 --> 00:05:20.160 looking at the way we build UI capabilities, and how that makes 88 00:05:20.160 --> 00:05:25.140 things simpler and better and faster for customers. It's also 89 00:05:25.140 --> 00:05:29.010 involved leveraging some more public cloud services. Whereas 90 00:05:29.040 --> 00:05:32.670 in prior iterations, Mime OS has been more of an internal one. 91 00:05:33.150 --> 00:05:35.970 And so in terms of what we've delivered from a customer 92 00:05:35.970 --> 00:05:44.190 perspective, we delivered a new suite and new methodology for 93 00:05:44.190 --> 00:05:48.120 delivering email security cut to customers, called Email Security 94 00:05:48.120 --> 00:05:52.860 Cloud Integrated. Now, what's remarkable about that is that a 95 00:05:52.860 --> 00:05:57.630 customer can go from finding us to full deployment and 96 00:05:58.170 --> 00:06:01.710 generating value in under four minutes. And that gives you an 97 00:06:01.710 --> 00:06:06.150 example of the type of power that we're building within the 98 00:06:06.180 --> 00:06:10.650 X1 platform and how responsive we are being to some of the 99 00:06:11.100 --> 00:06:15.240 needs that customers have, as well as some of the 100 00:06:15.240 --> 00:06:18.030 opportunities that our channel partners are really interested 101 00:06:18.030 --> 00:06:20.850 in, in terms of how do they demonstrate value to customers 102 00:06:21.090 --> 00:06:22.170 really, really quickly. 103 00:06:24.959 --> 00:06:29.459 Michael Novinson: Interesting, and what are some of the primary 104 00:06:29.459 --> 00:06:32.159 ways you've seen customers capitalize and are taking 105 00:06:32.159 --> 00:06:33.839 advantage of these new capabilities? 106 00:06:35.220 --> 00:06:37.770 Peter Bauer: Well, I think if you think about the challenges 107 00:06:37.770 --> 00:06:42.390 that customers are plagued with, there's the threat landscape, 108 00:06:42.780 --> 00:06:46.350 and the great amount of interest that adversaries have in 109 00:06:46.380 --> 00:06:49.860 infiltrating the workplace. So one of the things that you saw 110 00:06:49.860 --> 00:06:52.680 us launch and we'll talk about this in a second is our new 111 00:06:52.680 --> 00:06:56.310 brand identity around work protected. See, I'm even wearing 112 00:06:56.310 --> 00:07:02.010 the sweatshirt today. Really, the digital workplace has become 113 00:07:02.010 --> 00:07:08.850 such a dynamic lens of work surface, because of hybrid work. 114 00:07:08.850 --> 00:07:12.840 And I know it's 2022, it's not news to point out how much 115 00:07:12.840 --> 00:07:16.620 remote work is going on, it's really accelerated. But the 116 00:07:16.620 --> 00:07:23.640 opportunities for attackers to leverage the gaps between the 117 00:07:23.640 --> 00:07:27.000 verifications and the confidence that we used to have exploit 118 00:07:27.000 --> 00:07:31.530 human beings get in between different purported identities 119 00:07:31.530 --> 00:07:34.140 that people have on different communication systems, be that 120 00:07:34.140 --> 00:07:38.160 email or WhatsApp or LinkedIn identity, and really get 121 00:07:38.160 --> 00:07:41.940 involved in social engineering, stealing credentials, deploying 122 00:07:42.060 --> 00:07:45.930 ransomware malware and other things. This digital workplace 123 00:07:45.930 --> 00:07:49.830 is a risky environment, and customers are looking for ways 124 00:07:49.830 --> 00:07:55.890 that can address that. But at the same time, do two other 125 00:07:55.890 --> 00:07:59.640 things. One is really simplify the internal environments to 126 00:07:59.640 --> 00:08:03.240 avoid a proliferation of point solutions to do all sorts of 127 00:08:03.240 --> 00:08:07.320 things, security awareness, training, mail filtering, the 128 00:08:07.320 --> 00:08:12.120 incident response stuff, the data archiving and data recovery 129 00:08:12.120 --> 00:08:16.350 capability in the event of a ransomware situation. So they're 130 00:08:16.350 --> 00:08:20.280 looking at how do they simplify their lives? And then also, how 131 00:08:20.280 --> 00:08:22.890 do they integrate whatever they buy, with the rest of the 132 00:08:22.890 --> 00:08:25.710 systems that they have you that sort of advanced endpoint 133 00:08:26.430 --> 00:08:29.970 technology or thermal SOAR environments. And so that's 134 00:08:29.970 --> 00:08:33.600 really where Minecraft comes into it is, is dealing with that 135 00:08:33.600 --> 00:08:37.350 risk, but at the same time reducing the complexity and 136 00:08:37.350 --> 00:08:41.610 strengthening the overall security ecosystem the customer 137 00:08:41.610 --> 00:08:42.090 has. 138 00:08:43.560 --> 00:08:46.500 Michael Novinson: Absolutely. Let's get to the crystal ball 139 00:08:46.500 --> 00:08:49.740 here for a minute, if we can look ahead to 2023. Off the top, 140 00:08:49.740 --> 00:08:51.480 I'd love to get a sense of what do you feel is the biggest 141 00:08:51.480 --> 00:08:53.970 market opportunity for Mimecast in the year ahead? 142 00:08:53.000 --> 00:09:00.470 Peter Bauer: You know, I think customers or the world is 143 00:09:00.470 --> 00:09:07.250 dealing with so much change and transition. We've come from an 144 00:09:07.250 --> 00:09:10.700 environment of really high workforce turnover. And so 145 00:09:10.700 --> 00:09:14.690 you've got a lot of new people in companies and a lot of new 146 00:09:14.690 --> 00:09:20.030 people in companies that aren't necessarily solely well inducted 147 00:09:20.060 --> 00:09:24.230 because the induction process is all being done remotely. So they 148 00:09:24.230 --> 00:09:29.660 don't necessarily know the norms and the people and the methods 149 00:09:29.660 --> 00:09:34.700 for them to intuitively counteract cybersecurity threats 150 00:09:34.700 --> 00:09:38.570 and social engineering threats is much diminished. So it makes 151 00:09:38.600 --> 00:09:43.250 organizations because of this social fabric and the sort of 152 00:09:43.250 --> 00:09:48.200 internal security intelligence of other companies' workforce as 153 00:09:48.200 --> 00:09:52.520 unraveled. It makes them so much more vulnerable to being duped 154 00:09:52.520 --> 00:09:56.090 into doing things. They don't know what the norms are. They 155 00:09:56.090 --> 00:10:00.830 knew there's high, there's much less tenure in many aspects of 156 00:10:00.830 --> 00:10:04.850 the workforce. And at the same time that transparency into that 157 00:10:04.880 --> 00:10:08.180 for an attacker is really high. And they can see on LinkedIn, 158 00:10:08.180 --> 00:10:11.570 exactly, who's the new people? What are the roles, they can 159 00:10:11.570 --> 00:10:14.210 build up the sort of social graph the chart of the 160 00:10:14.210 --> 00:10:17.900 organization really, really easily. So I think as we look 161 00:10:17.900 --> 00:10:22.910 into 2023, companies being able to work protected and know that 162 00:10:22.910 --> 00:10:26.120 their work is protected, is going to take a great deal more 163 00:10:26.120 --> 00:10:29.960 care and attention. And I dare say, if we don't get it right, 164 00:10:29.960 --> 00:10:33.170 there will be some pretty profound horror stories that 165 00:10:33.170 --> 00:10:33.890 come out of it. 166 00:10:35.760 --> 00:10:37.530 Michael Novinson: Of course, what are the some of the key 167 00:10:37.530 --> 00:10:40.440 technology investments that you're hoping to make in the 168 00:10:40.440 --> 00:10:40.950 year ahead? 169 00:10:41.970 --> 00:10:47.850 Peter Bauer: Yeah, so if you think about what we've launched 170 00:10:47.850 --> 00:10:54.300 with Email Security Cloud Integrated, it's a new format 171 00:10:54.480 --> 00:10:58.650 for delivering email security technology. With Mimecast 172 00:10:58.650 --> 00:11:01.830 success has been built. Yes, email security is a very 173 00:11:01.830 --> 00:11:07.020 important and it's a flagship use case. But it forms part of 174 00:11:07.020 --> 00:11:10.380 an overall value equation that aims to reduce complexity and 175 00:11:10.380 --> 00:11:12.480 drawdown risk for customers. So there are many other 176 00:11:12.690 --> 00:11:17.190 capabilities around that we have security awareness training, 177 00:11:17.640 --> 00:11:24.480 archiving and compliance, email encryption, business continuity, 178 00:11:24.480 --> 00:11:28.050 data recovery, there are many other components to it. And so 179 00:11:28.320 --> 00:11:30.600 on the one hand, from a technology investment point of 180 00:11:30.600 --> 00:11:33.900 view, we're going to be building out our cloud integrated suite, 181 00:11:34.320 --> 00:11:37.890 to be able to incorporate more of those things in new formats 182 00:11:37.890 --> 00:11:42.630 that are easier to use, and address, I think, a whole 183 00:11:42.630 --> 00:11:46.020 exciting new segment, or additional segments of the 184 00:11:46.020 --> 00:11:53.220 market for us. But I think one thing we've had to continue to 185 00:11:53.250 --> 00:11:58.260 work on is the range of attacks and threats, the creativity of 186 00:11:58.260 --> 00:12:02.370 adversaries, is somewhat boundless. And so working on 187 00:12:02.370 --> 00:12:08.550 technologies that can continue to identify risks, can I 188 00:12:08.580 --> 00:12:12.540 continue to look deeper and deeper and deeper into not just 189 00:12:12.540 --> 00:12:16.020 individual messages, but chains of communication, and 190 00:12:16.020 --> 00:12:20.460 understanding sort of social graphs and metadata and kind of 191 00:12:20.460 --> 00:12:26.520 enriching the algorithm to catch risky things, and rely, firstly, 192 00:12:26.520 --> 00:12:29.730 on the computer or on our technology to block those things 193 00:12:29.730 --> 00:12:32.790 and keep those away. But we can't interrupt work, we can't 194 00:12:32.790 --> 00:12:35.910 break workflow processes, we can't unplug the machines to 195 00:12:35.910 --> 00:12:38.940 make the company more secure, we have to keep communications 196 00:12:38.940 --> 00:12:42.720 flowing. So it's also about working and making human beings 197 00:12:42.720 --> 00:12:46.050 smarter, giving them guidance, so that they can make smart 198 00:12:46.050 --> 00:12:49.230 decisions, and also allowing them to be part of the feedback 199 00:12:49.230 --> 00:12:54.360 loop, if you see something, say something, opportunity for each 200 00:12:54.360 --> 00:12:57.360 employee to be able to report things, and then have 201 00:12:57.360 --> 00:13:00.960 intelligent ways to process that and add that to the collective 202 00:13:00.960 --> 00:13:03.570 intelligence and response to the organization. 203 00:13:03.179 --> 00:13:05.879 Michael Novinson: Absolutely, and from the standpoint of the 204 00:13:05.879 --> 00:13:07.889 customer, what do you feel is the biggest challenge that 205 00:13:07.889 --> 00:13:09.809 they're going to have to grapple with in 2023? 206 00:13:10.110 --> 00:13:14.790 Peter Bauer: Well, it's a tough budgetary environment. So I 207 00:13:14.790 --> 00:13:19.110 think, customers are really having to think about where are 208 00:13:19.110 --> 00:13:27.270 the greatest risks? And where is the best investment of dollars 209 00:13:27.270 --> 00:13:32.490 in a cybersecurity program? So I think we've gone through a time 210 00:13:32.490 --> 00:13:37.290 of grip of heightened awareness around cybersecurity risks. And, 211 00:13:38.340 --> 00:13:42.840 no board or no CEO wanted to be the one that constrained the 212 00:13:42.840 --> 00:13:46.230 security program from being able to spend money or make 213 00:13:46.230 --> 00:13:48.960 investments, unless something went wrong. And the security 214 00:13:48.960 --> 00:13:51.870 team says, we've been asking for better this or better that for a 215 00:13:51.870 --> 00:13:55.200 long time. And they always say no, and that's why things have 216 00:13:55.200 --> 00:14:00.600 blown up. So I think there's been a loosening of strings over 217 00:14:00.600 --> 00:14:05.520 time. And that's also created some level of tool bloat inside 218 00:14:05.520 --> 00:14:10.170 organization. So I think now with economic pressure, there's 219 00:14:10.170 --> 00:14:13.380 a little bit more CFO scrutiny to say, well, what is the 220 00:14:13.380 --> 00:14:17.010 strategy? How are you going to use this money? Tell me where 221 00:14:17.010 --> 00:14:20.190 the biggest risks are? Don't just give me a long flat list of 222 00:14:20.190 --> 00:14:22.410 risks and say, well, we got to buy something to deal with all 223 00:14:22.410 --> 00:14:25.440 of this stuff. Let's have a conversation around where the 224 00:14:25.440 --> 00:14:28.320 biggest risks are, and where are the intersections between those 225 00:14:28.320 --> 00:14:31.980 risks. And that's really where we're quite focused in saying, 226 00:14:32.280 --> 00:14:34.740 there's a people, there is a communications and there's a 227 00:14:34.740 --> 00:14:38.850 data intersection, around email and collaboration technology. 228 00:14:40.500 --> 00:14:43.650 Here's a solution that can help you address that acute point 229 00:14:43.710 --> 00:14:49.290 there. And if we do that well, we draw down risks really cost 230 00:14:49.290 --> 00:14:51.120 effectively for an organization. 231 00:14:53.400 --> 00:14:55.320 Michael Novinson: Of course, finally, here, what's your top 232 00:14:55.320 --> 00:14:56.670 priority for 2023? 233 00:14:58.100 --> 00:15:02.810 Peter Bauer: I think so many CEOs today are all thinking 234 00:15:02.810 --> 00:15:10.640 about how the social fabrics that we built in our businesses, 235 00:15:10.640 --> 00:15:14.180 the communities that we built, the people and employees that we 236 00:15:14.180 --> 00:15:18.050 built within our businesses, in the years prior to the pandemic 237 00:15:18.230 --> 00:15:22.250 really helped us to succeed and to continue innovating and 238 00:15:22.250 --> 00:15:26.690 working during the pandemic. But obviously, over the years of 239 00:15:26.720 --> 00:15:29.390 remote working, some of that loosened and some of that 240 00:15:29.390 --> 00:15:32.720 unraveled. So, what I'm really spending time thinking about for 241 00:15:32.720 --> 00:15:37.280 2023 is, what's the format that people opt back into willingly 242 00:15:37.280 --> 00:15:41.960 to say, we want to be a vibrant organization with a strong 243 00:15:41.960 --> 00:15:44.900 social culture, and that's not going to happen by itself. 244 00:15:44.900 --> 00:15:48.350 That's going to happen if we all show up for each other. And we 245 00:15:48.350 --> 00:15:52.280 turn up and we make that happen, and how do we encourage that? 246 00:15:52.280 --> 00:15:56.600 How do we support that? Because that's such an important part of 247 00:15:56.600 --> 00:15:59.480 the learning and the problem solving. And we spoke at the 248 00:15:59.480 --> 00:16:02.720 start of the call about the IQ of the organization. I think 249 00:16:02.720 --> 00:16:06.410 organizations that get to spend some more in person time 250 00:16:06.410 --> 00:16:09.920 together, I think that raises the IQ of the organization, too. 251 00:16:09.920 --> 00:16:13.250 So that's a big focus for me is bringing people back together 252 00:16:13.250 --> 00:16:16.310 and whether that's gatherings or whether that's a day or two a 253 00:16:16.310 --> 00:16:21.050 week in the office. That's a big focus for me and my team as we 254 00:16:21.050 --> 00:16:22.340 go into next year. 255 00:16:23.350 --> 00:16:25.510 Michael Novinson: Of course, nothing beats face to face time 256 00:16:25.510 --> 00:16:27.850 together. Peter, thank you so much for the time. 257 00:16:28.540 --> 00:16:30.640 Peter Bauer: Great, thanks, Michael. Have a good one. 258 00:16:30.000 --> 00:16:32.760 Michael Novinson: Of course! We've been speaking with Peter 259 00:16:32.760 --> 00:16:37.380 Bauer. He is the co-founder, CEO and board member at Mimecast. 260 00:16:37.620 --> 00:16:40.830 For Information Security Media Group, this is Michael Novinson. 261 00:16:41.130 --> 00:16:41.940 Have a nice day.