Bug proves too costly for Trend Micro

A bug discovered in Trend Micro’s own software last April proved to have much more serious implications. The bug, which affected thousands of Trend Micro clients, has cost the company US$8.06 million and has forced it to report lower revenue and profit forecasts for the quarter covering April to June.

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By  Caroline Denslow Published  July 17, 2005

A bug discovered in Trend Micro’s own software last April proved to have much more serious — and very expensive —implications. The bug, which affected thousands of Trend Micro clients, has cost the company US$8.06 million and has forced it to report lower revenue and profit forecasts for the quarter covering April to June. Trend Micro has reduced its Q2 sales forecast by 2.9% to US$151.7 million. Its net income will be even harder hit, as the new estimate of US$31.2 million is 16.7% lower than its original forecast in April. However, a spokesperson clarified that the company hasn’t lost many corporate contracts over the bug because it is not easy to change anti-virus policies. The bug, which appeared on April 23, started after a faulty software update file absorbed the processing power of PCs that had downloaded it, causing them to significantly slow down or, in some cases, be completely disabled. It affected mainly PCs using the Windows XP operating system with Service Pack 2 and Trend Micro's OfficeScan PC-cillin Internet Security 2005 VirusBuster software, according to the company. The company immediately set up call centres to field enquiries about the bug and issue fixes. Most the US$8 million costs were spent in running these call centres. About 28,300 customers and about 700 corporate licensees — mostly from Japan — were affected, the company said, which based the figures from calls made to the help lines. However, Trend Micro admitted that the real number of affected users is unknown as not all clients who have experienced the problem reported it to them, the Trend Micro spokesperson said.

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