Slowing Revenues and Declining Income at Trend Micro Helping Kaspersky in Efforts to Reach Number Three

In the paid desktop antivirus and internet security world, Symantec and McAfee have generally been recognized as the 800-pound gorillas with Trend Micro trailing at number three.  Kaspersky founder Eugene Kaspersky has expressed a strong  desire to catch up to Trend Micro.  In fact, Moscow based Kaspersky was listed   as one of only 5 global security companies in the “Leaders” portion of the Gartner 2012 Magic Quadrant for Endpoint Protection Platforms.

Disappointing  Q3 Results for Trend

Trend Micro did not have a great Q3.  First, the good news.  On the non-financial front - The company was issued over a dozen patents in Q3.  They announced   new mobile solutions.  They rolled out their 2013 Internet Security product line.  They     announced their latest iteration of their cloud-based security infrastructure, the Smart Protection Network,

Now for the bad - Year over year sales were down 2%  (Q3) , and net income, down 25%. The  drop in net sales was due to declines in both North America and Europe. Not good signs when given that the economies have been improving in these markets.   Japan had 3% growth.

On a revenue basis, (Pre GAAP before adjusting for deferred revenue) – North America  revenue declined 10% and Europe 8%.  Japan grew by 10%. (Q3 year over year)

Unlike the other major vendors, Trend Micro is heavily dependent on Japan for their revenue.  This grew to 51% in Q3 2012.  North America and Europe had 20% and 16% shares, respectively.  Sales were down in both the enterprise and consumer segments. 

Q4 is unlikely to help Trend.  Net sales are projected to be flat and net income down 41%.

This isn’t a pretty trend for Trend.  Since Kaspersky  has decided to remain a private company, there aren’t many publically available financial numbers for them, but they have to be pleased. If these trends continue, Kaspersky may be able to reach number three in 2013.

Despite their financial miscues, Trend Micro continues to be innovating. There are the patents mentioned above.   This week, Trend Micro announced their  free   Online Security Assessment Tools for Cloud, Cyber & Mobile Security.  These tools are designed to   provide customers with an assessment of their current business' security posture with respect to cloud adoption, consumerization, and targeted cyber attacks.  

Trend Micro hasn’t participated in Virus Bulletin (www.virusbtn.com ) testing since 2008.  They finished second in the AV-comparatives (www.av-comparatives.com ) "September 2012 Antivirus File Detection Test of Malicious software", however.

About Virus Bulletin   www.virusbtn.com

UK based Virus Bulletin started in 1989.  They provide PC users with a regular source of intelligence about computer viruses, their prevention, detection, and removal, and how to recover programs and data following an attack.  The Virus Bulletin website is at www.virusbtn.com

About AV-comparatives     www.av-comparatives.org

AV-Comparatives is an Austrian Non-Profit-Organization, which is providing independent Antivirus software tests free to the public.  Go to their website to view all the great comparative reports and surveys they publish.  A great number of their reports are free.

Sophos Offers Partners New Complete Security Suites

Sophos   introduced new Complete Security Suites on Tuesday: Web Protection, Data Protection, and Complete Security.  According to Sophos, these suites offer Sophos partners the solutions   required to help their clients address the "evolving security challenges IT departments are facing due the “consumerization” of IT, the rise of advanced persistent threats, and the increase in malware."

“We recognize that partners are operating in a competitive environment, so they need tools that will help them meet their clients’ demands for stronger security systems,” said John Shaw, vice president product management Sophos.  "With our suites, customers know it’s always Sophos securing them, and they can be confident that they will be backed by both our industry-leading support and our excellent partners.”

Reasons for a Suite

• Supposedly everything will work together
• Ease of licensing
• Simplified management
• Usually provides substantial cost savings over purchasing functionality separately 
• One stop shopping 
• A con – companies will usually not get “best of breed” for some of the components

The Sophos Complete Security Suite  is their Uber Suite, combining: endpoint protection (including Macs), email protection (spam, viruses and to control sensitive date), encryption (full-disk, email, file, and folder), web protection at the gateway and endpoint, and mobile controls (IOS, Android, Blackberry, and Windows mobile devices).  A virtual appliance is included.  

Sophos Data protection Suite - Take out the web and mobile control from the Complete Security Suite.  A virtual appliance is included. 

Sophos Web Protection Suite - Take out email, encryption, and mobile control from the Complete Protection Suite. 

The suites also include support, free security updates, and software upgrades.

To view a comparison of the suites:

http://www.sophos.com/en-us/products/complete/comparison.aspx

Companies evaluating the Web Protection and Data Protection Suites may want to consider licensing the Complete Security Suite, instead.  At the 200-seat level, the premium is just a little over 21% on a 3-year contract.

About Some of  the Other Major Vendors

• McAfee has ½ dozen endpoint business solutions, nothing   as comprehensive as Sophos, three for SaaS and only one offers encryption.  http://shop.mcafee.com/ProductRecommender.aspx
• Symantec – doesn’t offer a comprehensive suite for SMB’s – though they do offer a cloud endpoint as well as the r standard endpoint solution http://www.symantec.com/solutions/smallbusiness/
• Trend Micro offers three flavors of internet security suites for SMB’s – including a hosted one http://buyonline.trendmicro.com/store/trendsb/en_US/home
• Kaspersky offers three flavors of suite protection for businesses – none seems to be as comprehensive as Sophos’ new offering http://usa.kaspersky.com/store/kaspersky-business-software/compare-products
• ESET   has an ESET Smart Security solution for that includes Mail Security for Microsoft Exchange server.  Not  as comprehensive as the Sophos solution.  http://www.eset.com/us/business/smb/
• Check Point doesn’t usually come to mind when people talk about internet security.  They offer a couple of cloud based services for SMBs.  The   thing about these though is that you need to license their premium package to get antivirus, antispam, application control, and URL filtering protection.  http://www.checkpoint.com/smb/check-point-cloud/index.html

Sophos also offers a trio of solutions for businesses with less than 50 employees.  Nonetheless, their Complete Security Suite raises the bar versus their competitors. 

But what about home users?  Sophos is more of a business play.  They do offer a free endpoint product for Mac home users - Sophos Anti-Virus for Mac Home Edition.

Sophos is headquartered in Boston, US and Oxford, UK.  www.sophos.com

Gartner Magic Quadrant for Endpoint Protection Platforms 2011

Gartner released its Magic Quadrant for Endpoint Protection Platforms report on January 16. Five products made it into the Leaders Quadrant. From an eyeball perspective, the ranking of these in the Leaders Quadrant were Symantec, McAfee, Sophos, Trend Micro, and Kaspersky. The “we are not going to promote our place in the quadrant” award goes to Total Defense. Magic Quadrant for Endpoint Protection Platforms by Peter Firstbrook, Neil MacDonald, John Girard. January 16, 2012 ID: G00219355. Bravilna to these companies!

Note: This is the report for 2011.  To see the 2012 report published in January 2013  http://kensek.blogspot.com/2013/01/gartner-magic-quadrant-for-endpoint.html

To see the 2013 report published in January 2014  http://kensek.blogspot.com/2014/02/gartner-magic-quadrant-for-endpoint.html

Av-Test.org tested eight business endpoint protection products (not all were internet security suites) as part of their December 11 testing. All received certification. They were scored from 0 to 6 on three components, Protection, Repair, and Usability. The products and combined scores are below.



Twenty-three home internet security products were part of the testing as well. http://kensek.blogspot.com/2012/01/av-test-product-review-and.html
To view the tests and download one-page reports:

http://www.av-test.org/en/tests/test-reports/novdec-2011/


Using Gartner Magic Quadrants

The below is from a Gartner piece on utilizing their Magic Quadrant.

Clients use Magic Quadrants as a first step to understanding the technology providers they might consider for a specific investment opportunity.

Keep in mind that focusing on the leaders' quadrant isn't always the best course of action. There are good reasons to consider market challengers. And a niche player may support your needs better than a market leader. It all depends on how the provider aligns with your business goals.


http://www.gartner.com/technology/research/methodologies/research_mq.jsp


Miscellaneous Comments on Kaspersky

• Kaspersky recently announced that they were not going to have an IPO (initial public offering) and repurchased the 20% of the company they didn’t own. Nice article on Channelnomics about this “Kaspersky Repositioning for Renewed Growth” http://channelnomics.com/2012/02/08/kaspersky-positioning-renewed-growth/


• Kaspersky Internet Security 2012 was www.av-comparatives.org Product of the Year for 2011.