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The Way Business Is Moving

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Issue Date: June 2007

QA

1 June 2007

Rik Turner interviews Natalya Kaspersky, CEO of Kaspersky Lab, a Russian developer of security software that made its name in the anti-virus market.
Trading on the reputation for skilled IT professionals left by the Soviet Union and charging prices in keeping with Russian salary levels, Kaspersky has built a business selling to a list of OEM customers that reads like the Who's Who of information security. Now its sibling co-founders and CEOs plan to bring a new product, data leakage prevention, to the international market.
Q How is your international expansion going?
A In the German-speaking world we are number one in retail and number five overall there. We are also number five in Spain and we have good market share in France. We have had a local office in the UK for 10 years, and although we had some initial success, it has been very difficult. In Japan, where we started in 2003, we have had an even more negative experience. In these two island markets, we have lacked a strong brand, and we look too young.
Q How about the US?
A We have been selling to OEM customers there since 1999 and with our own branded products since January 2005, enjoying a fivefold growth in revenue over the two years. We are in retail and online, as well as in the low-end SMB channel there. Around the end of the year we signed a distribution deal with Tech Data.
Q In building your brand, you have already begun bundling multiple edge security functions with your AV product for business users, which is fine for the SMB market, but how do you intend to address the enterprise market?
A We have Pan-European distributors and we have VARs in several countries, but we also want to get more relationships with SIs, but they can be difficult to deal with, because they have their own preferences and they also want large volumes. They are not interested in AV, so they do not push it.
For this reason, three years ago we set up a subsidiary in Russia called InfoWatch to address the internal threat/data leakage issue, and six months later we had the big Russian SIs coming to us. InfoWatch has an average selling price of $400 000 and lots of consulting services on top, so whereas AV has upsell of just 20% to 30%, with InfoWatch there is the potential for 100%.
Q Will you roll that portfolio out internationally?
A We started selling InfoWatch in Germany in February and we have plans to launch it in the UK. It does device, traffic and, shortly, web monitoring, as well as storage of suspicious data in a database, which today is only Oracle but in the next release, will also support [the open-source] MySQL. We compete with different segment players in each area, but we combine all these functions.
Q Would it make sense to bundle InfoWatch with your AV and other anti-X software?
A We have discussed a folding in of InfoWatch, but the product lines sell to two quite different enterprise customers: the AV and anti-X products sell to system administrators,while the data leakage stuff sells to the security guys.
Q Clearly you face the challenge of ousting entrenched incumbent vendors of edge security in the enterprise market.
A Indeed, if you take the AV market, for example, there are the Big Three [Symantec, McAfee and Trend] and then the tier-2 players, including ourselves. As a way into corporate accounts, we have got a product called Second Opinion Solution, which is really our regular business product with realtime scanning turned off, which you can deploy to check that the principal gateway security product did not miss something, running as an ad hoc scan you can perform on a monthly basis, for instance.
Q When will you bring InfoWatch to the UK?
A Hopefully during the course of this year, although we need sales staff and a consulting and services capability to do so. We do not have the headcount today, and we are entirely self-funded, so we must be realistic.


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