Cleaning up the channel

Antivirus software vendor Kaspersky recently hosted its first ever Middle East and Africa channel conference in Dubai, giving more than 70 partners a taste of what they can expect from the company this year. Channel Middle East was there to grill the two men behind Kaspersky’s local channel strategy — regional managing director Tarek Kuzbari and channel manager Aman Manzoor

Tags: Kaspersky LabUnited Arab Emirates
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Cleaning up the channel Tarek Kuzbari and Aman Manzoor. (Khatuna Khutsishvili/ITP Images)
By  Andrew Seymour Published  June 11, 2009 Channel Middle East Logo

How much more work is there to do to your Middle East channel strategy?
Tarek Kuzbari: There is still lots of work to do because we have recently started here in the region, opening our office back in November. We have already started to issue our first channel programme, which is going to organise all our channel relations. You are definitely going to see lots of improvement on that programme in the next two years, but we prefer to do that step-by-step so that we can collect feedback and see how the market reacts.

We are a 100% channel-driven company — we don’t sell directly to clients at all. That should answer the question.

Have partners started shifting to the new programme and how will this impact the structure of your channel?

Aman Manzoor: I think around 90% of that process has already started. The key thing here is focus and making sure the partner’s corporate strategy or core competencies are actually reflected in the way they associate with Kaspersky. With the old partner programme, the major difference was that a corporate reseller selling into a corporate customer was also required to sell retail products, when it didn’t have so much competency there. With the new partner programme we are able to focus on the core competencies and maybe add value to that, which is the essence of it.

Has it been too easy to become a Kaspersky partner in the past?

TK: Yes, because we were new in the region and we were offering the chance to enter this market to any company that was interested in becoming a partner. But we are now going to focus more on our partners — we are looking for ones that are going to add more value to our products, presence and customers. There were not that many requirements for being a partner before, but that is changing.

So will this enhanced focus on partners open the door to new ones or see the overall number reduced?
TK: It will actually open the door to new partners. Right now in the region we have around 24 direct partners and this region requires more partners in terms of distributors, enterprise partners and also resellers. We need to grow, but we must ensure we do it in the best way without causing any kind of conflict between the new partners and the old partners. It is important to maintain the interests of all of them.

Kaspersky tends to be seen as a very technical, product-driven company, rather than a channel-centric organisation. What would be your response to that?
AM: We are a 100% channel-driven company — we don’t sell directly to customers at all. That should answer the question.

TK: That is especially the case in the Middle East. Because we are from the region we know a lot about the market, but there are still things we have to learn. And nobody can define what the requirements of the customers are better than our local partners. They are in direct contact with their customer so we know how important it is to deal with them to achieve that.

Kaspersky is permitted to sell into markets that its US competitors are restricted from, such as Iran and Syria. How are you looking to take advantage of this?

TK: In Iran we have more than 60% market share and in Syria we are number one in a lot of companies. We are really looking to invest more in these markets because they are promising markets with growth potential, even though there are still a lot of competitors, such as BitDefender, ESET and Avira, that are able to sell there too.

Are you going to exploit the fact that you can develop a local presence in those markets, whereas competitors such as McAfee and Symantec can’t?
TK: We are going to appoint a country manager for Iran because right now it is considered the third largest Middle East country for us in terms of revenue. We believe there is still a huge demand on our product even though there is lots of piracy there and no copyright [regulations] because people are still looking for legal licences and things such as service. We are going to do our best to achieve and maintain that, starting with the appointment of a country manager and then planning for different additional support teams.

Kaspersky made sales of US$91m from Eastern Europe and the Middle East and Africa last year. What percentage of that figure does MEA contribute?
TK: We have around 11% or 12%. In terms of EEMA, Russia is number one, Middle East is supposed to be number two.

What improvements can partners expect to see in Kaspersky’s discount and deal registration policies this year?

AM: We intend to do is put a structured procedure in place when it comes to discounting policies so that we have levels of documentation and transparency that are required to get particular discounts. We will require partners to be more transparent based on the level of discount they ask for. Deal protection is one of the opportunities of improvement that we have. Creating a structured process that is visible to all partners will help a great deal. Partners will be able to report a particular opportunity and invest in developing that opportunity, and at the end of it be rewarded for their investment.

Setting the right price

Kaspersky partners believe plans to adjust prices according to the spending power of individual markets could boost business, although some claim the move glosses over more serious channel issues that the company faces.

The anti-virus software outfit intends to modify its pricing structure to reflect the disparate buying strengths of markets throughout the MEA region.

“Looking at the market I think pricing adjustment has to be done because we are getting competition from [Kaspersky] products in India that are being sold cross-territory,” said Deeraj Kumar Godla, regional manager at Jordan-based IT provider iAxcess. “I think it would be good for a pricing adjustment to happen so that we can compete and sell aggressively versus Symantec and Trend Micro as well.”

Mohammed Faizel, retail manager at Kaspersky distributor Comguard, also supported plans for local price realignment. “Even a little bit of a rise would help to make our margins better and help from the retailers’ perspective as well,” said Faizel.

Regional Kaspersky boss Tarek Kuzbari said the adjustment of prices in markets such as Afghanistan could make the difference between customers purchasing legitimate products and associated services than not at all.

“We are trying our best to achieve customer satisfaction in terms of pricing, but at the same time maintain the image of the product,” explained Kuzbari. “We are not the cheapest product in the market and we are not going to be, but we are going to adjust prices to meet customer demand.”

One Kaspersky partner from the region disagreed that price adjustments were a positive step, insisting that the vendor needed to get on top of other challenges first.

“We are working in a region where pricing has never been an issue, especially for anti-virus because you still have the free versions — good products like AVG that can be downloaded for free,” he said. “The point is that Kaspersky doesn’t have a proper business model — right now there is too much of a price war amongst the distributors and I don’t believe that adjusting prices is going to solve any issues.”

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