Choose

Growing pains in Latin America's IT security market

Alejandro Musgrove

VP of sales for Latin America and the Caribbean/Kaspersky

Published  Thursday, October 15, 2009

International consultancies such as IDC have identified security, together with BI and ERP, as one of Latin America's top IT investment priorities. But in spite of the demand, IT security providers operating in the region must overcome roadblocks and adjust to shifting market conditions. 

BNamericas caught up with anti-malware firm Kasperksy's VP of sales for Latin America and the Caribbean, Alejandro Musgrove, to discuss the retail sector's relevance to the company's strategy, where the company has gained market share in Latin America, and the challenges of entering the Chilean IT security market.

BNamericas: In March, you said Kaspersky was going to take steps to extend its Latin America presence through retail. What has the company done since then to accomplish that goal?

Musgrove: We have hired two people with the specific goal of developing our retail presence in the region. We have also reached an agreement with a Spanish wholesaler that is operating in Mexico that is going to be our retail wholesaler.

We already have retail presence in Mexico, Colombia, Guatemala, Panama and Brazil. Now we are advancing in Venezuela, Peru, Chile and Argentina.

The other important piece of news is that, as of October 5, we have launched the 2010 edition of Kaspersky's antivirus and internet security programs.

BNamericas: How is Kaspersky going to increase its retail presence in the countries that you mentioned - Venezuela, Peru, Chile and Argentina?

Musgrove: We are going to be relying on our retail wholesaler, which will be seeking partners in each one of those countries. The partners will provide coverage, sales point, training, product positioning and information.

BNamericas: What percentage of Kaspersky's Latin America sales currently comes through retail?

Musgrove: Retail currently accounts for about 15% of our sales. But, if we consider consumer products - which include versions of our antivirus and internet security programs sold individually through resellers in all of Latin America - then we are talking about 30%.

BNamericas: How is that consumer product percentage expected to change during the next few months?

Musgrove: We expect that 60% of sales will come through the corporate segment, while 40% of sales will come through consumer sales. We are also seeing growth in the corporate segment.

BNamericas: By when do you expect to reach that breakdown? Is it for 2010?

Musgrove: Yes. We will start to see this balance upon releasing our new products [antivirus and internet security] which is happening now. It is part of our strategy and something that we will see during the next two halves.

BNamericas: How have Kaspersky's corporate sales gone thus far this year?

Musgrove: We are growing in spite of the crisis which has hit the region. We are meeting our goals that we set out, and even exceeding them slightly in dollar terms. We've seen this growth thanks to… the expansion of our distribution channel. The number of resellers that we have managed to sign up assures good coverage, especially of SMEs. We are seeing a big effect in clients that have 20-250 nodes.

BNamericas: How many new reseller agreements has Kaspersky set up in Latin America so far this year?

Musgrove: As of October, 1,900 resellers in Latin America have bought our products.

BNamericas: And how many of them were signed up this year?

Musgrove: That is a number that we are still analyzing. But, I suppose that we have increased our reseller base by about 75% this year.

BNamericas: Where is Kaspersky looking to form new partnerships?

Musgrove: We want to see organic growth throughout the region. Obviously, our interest in Brazil and Mexico is very high. They are markets with a lot of potential. At the same time, we don't want to turn our focus away from other markets.

BNamericas: You mentioned Kaspersky's sales in both the corporate and consumer segments. There are also many other competitors such as McAfee that have products in both segments. Has Kaspersky been able to gain market share?

Musgrove: I cannot divulge the specific internal numbers that we have. But, I can tell you that we are having a particularly strong impact in Mexico's retail market. In Colombia, we are seeing similar trends. In Brazil, we are advancing. Mexico represents our most mature market.

BNamericas: Why has Kaspersky had more success in Mexico relative to other countries in the region?

Musgrove: Basically because we have been operating in Mexico longer than other countries. We have been working with our retail wholesaler Micronet.

BNamericas: I understand that Kaspersky was intending on opening offices in both Chile and Colombia. Has the company been able to meet those goals?

Musgrove: No, not yet. We have not found the people that we are looking for. But, we are going to start 2010 with both those offices open.

BNamericas: Why have plans been delayed?

Musgrove: There was no specific decision to delay the plans in terms of our strategy or economics. Rather, we are looking for the correct people, and we have taken longer to do this. The Chilean market in particular is very mature, so we need to find the correct person to do this.

On the other hand, we don't feel that the offices are essential at this point, but that they will be in 2010.

BNamericas: Looking forward, where does Kaspersky see the largest business opportunities in Latin America?

Musgrove: There are certain countries that we will have to pay special attention to in order to take advantage of growth opportunities. Peru is one of them. Colombia is a country that keeps on growing. And Chile is another country that is receiving a lot of attention from us due to its advanced IT ecosystem. It is a difficult market to enter. But, I think that we have the partners necessary to provide coverage.

BNamericas: Why is it difficult to enter the Chilean market?

Musgrove: Due to its market maturity, you have to introduce your products well. The resellers are already well trained. They already have important product portfolios.

When you arrive to the Chilean market, you have to make an effort for resellers to incorporate your product.

Due to its market maturity, Chile also has the presence of all the IT security providers in the world. This is positive in the sense that it helps with the expansion of the category. But, one has to overcome all the noise to get the consumer's attention.

BNamericas: How does one go about doing that?

Musgrove: There are many ways to go about that. We hold workshops to reach users. We carry out events during which we tell consumers about the advantages of our products. This can help us a lot in Chile, where we're going to increase our presence. We have not been investing much in advertising, but rather in training.

ABOUT THE COMPANY:Kaspersky Lab is the world's largest privately held anti-malware company. Founded in 1997 in Russia, Kaspersky now has more than 900 employees and protects 250 million users worldwide. Last year the company's global revenues reached US$274mn.

USA Voice/Fax: (800) 535-2137 Santiago, Chile: +56 (2) 941-0300 info@BNAmericas.com Business News Americas. Copyright 1996-2009 All Rights Reserved.