The virus diaries

Anti-virus security specialist Kaspersky sets a model of how small companies can grow even in highly competitive markets.

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By  Sathya Ashok in St Petersburg Published  July 3, 2008

Kaspersky presents itself as an exception to what most everybody had come to assume to be the unshakeable law of the security market - that anti-virus is a commodity, and that there is no space for small players in it.

Formed a little over ten years ago, the rather small company (with employees hovering around the 1,000mark) has been growing at a fast clip over the last few years. According to Eugene Kaspersky, CEO of the company, the firm increased its revenues by 140% last year and expects to grow by no less than 80% this fiscal. So fast is the pace of growth, that Kaspersky believes the major challenge facing the company in the next few years is related to managing the growth and enabling the company to be as flexible as it has been, even as it becomes bigger.

Some might call this ambitious, but the fact of the matter remains, that Kaspersky stands as an example of a small company that, even in a highly competitive and apparently commoditised market such as antivirus and anti-spam, has made a name for itself and enjoys steady growth.

Kaspersky attributes the company's continued success to its technical expertise, its focus on product features and technology, and the right treatment of its partners. One can't help but agree that all of the former must have played a considerable part in the company's success so far - especially when you see 140-plus satisfied partners gathering for the firm's 10th International Partner Conference at St.Petersburg, Russia this week.

However, the factor that made all the difference might be that Kaspersky was not afraid to start small and it did not hurry to get to its goals.

In the fast-paced, demanding world of today, brand is everything and marketing spiel is a necessity. Companies are encouraged to always reach for more and become the jack-of-all-trades rather than the masters of one.

It is no wonder then that most people in the industry tend to scorn small players. The relatively small vendor is inevitably branded as confined to his niche, lacking funds, marketing muscle and technical resources, and therefore a goner from the start.

But this is not necessarily true. Companies backed by a solid technology foundation, which are willing to start small and work hard can eventually taste success in their chosen niches.

Kaspersky, for example, decided, as part of its strategy, to focus only on a specific area of security. That done, the team also decided that it would not spread itself too thin, too soon. This is why the Russia-based firm has taken ten years to build a sizeable international presence and is still in the process of setting up offices globally. (It claims partners operating across most territories already.)

Even now, when the company has gained relative strength and brand-recall in global markets, it is very conscious of its limitations and is taking cautious steps into the next phase of growth. Leader of the team Kaspersky states that the company will diversify its products and address the enterprise market better (it has remained a predominantly consumer player to date) in small moves over the next three years, when they have solidified their position further.

The future for Kaspersky is not going to be without its pitfalls. As it grows bigger, the company will have to decentralise a lot of its functions and maintain the relatively high ratio of good hires to ensure continuing success. Moreover, it won't be able to enjoy high growth rates uniformly (it is now doing so because it has started off from a relatively small base) and this will flatten out in the near future.

Be that as it may, Kaspersky remains a model of how relatively niche players can survive, grow and succeed even in highly competitive sectors. One that other small players in the ICT market might do well to follow.

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