|Panda spots market opportunity with cloud|
|Tuesday, 10 November 2009 00:00|
Anti- malware software vendor Panda Security is hoping for early-mover advantage in the market for cloud-based internet security with the launch today of PC protection services for small and mid-sized companies and consumers.
CEO Juan Santana told CBR the company had a history in its 10 years of trading of being ahead of market rivals in the introduction of emerging security technologies. He said the Bilbao-based business wanted to be the first vendor to popularise thin client anti-virus from the cloud. “Eventually I expect the whole industry to go that way,” he said.
Santana said the anti-virus sector was heading for some significant changes. “There is a heavily under-exploited opportunity in the area. The sector is highly profitable with an average EBITDA of 20% but average profitability will decline in the next couple of years. It is a very fragmented market and there are 31 anti-virus centric suppliers active in the sector which is simply too many to sustain. In five or six years, I expect there to be only five or six big players playing in the sector,” he suggested.
With Symantec and McAfee having dominant positions in the US, Santana sees biggest opportunities for growth in European and Asia Pacific regions. There Panda fights for share with the likes of Sophos, AVG, Kaspersky and Trend Micro.
Interestingly, TA Associates, the private equity investor behind Sophos, which is rumoured to be lining itself up for a Nasdaq listing next year, has recently acquired a 23% stake in AVG for around $200m.
Panda’s CEO believes he has the global footprint, the strategy and channel plans in place to be able to grow the company’s market share of around 3% now to 10% by 2012. By then IDC reckons the $13bn security segment will have hit the $20bn mark.
A market assessment produced by technology market analysts with Goldman Sachs confirms that the sector is growing at a rate of between 3% and 8%, mostly driven by consumer appetite for PC security. Around 30% of the whole market is estimated to be ‘free’ anti-virus software, popularise by the likes of AVG.
The trick for product vendors like Panda is to popularise their anti-malware software with free base versions, which also helps them populate their malware recognition databases. They also need slowly build brand awareness to the point that they can start to market up-sell options and paid-for services to the ‘free’ subscriber base.
Although AVG does not release figures, the CEO of that company JR Smith told us earlier this year that the free anti-virus product could be installed on as many as 85 million PCs and the business produces 30% net margins on sales that in 2007 were recorded as being $80m. “Around 60% of our business is with consumers and most of the paid user base started out using our free software,” Smith said.
Aiming to emulate that level of successful market penetration with what it believes to be stronger technology, today the Spanish number one released out of beta Panda Cloud Antivirus to consumers. It also announced a subscription-based hosted Panda Cloud Protection Service for SMBs that would handle the three threat vectors of end points, email and web.
Pricing has not yet been confirmed but the company guidance is that entry-level charges would run at around $40 to $70 per user per year for Windows systems threat protection.
The company explained its service is based on its Collective Intelligence threat database system that gathers malware information from its global community of users in the cloud to automatically identify and classify new malware strains in minutes.
The Collective Intelligence database is already a whopping 25TB in size, and hosts 48 million files of which around 56% are deemed malware variants against which suspects can be scanned and tested. Panda’s approach does not need compare all of a suspect file against its database, just a hash or snippet of that file. It is reliable and quick.
It will update and refresh PC anti-virus threat protection every 6 minutes, and with 99.4% of scanned files processed automatically, offers a much higher performance than currently available rival threat prevention offers. Against that, bandwidth usage is deceptively low, and Panda claims its system uses just 127 KB per day for an average client PC.
“We estimates that 52% of all malware has a life expectancy of only a day or less, so it is important for us to be able to update our threat protection at speed,” Santana said.
Available in 11 languages, Panda Cloud Antivirus works under Windows XP, Vista and Windows 7 operating systems and only consumes 20 MB of RAM.
Traditionally anti-virus scans have had a 13% performance hit on the PC. The new approach of cloud-based scans use less than 3% of PC resources, Panda is claiming.
“We’ve never acquired technology,” Santana commented, “which brings us huge advantages over our rivals who have to integrate together technologies from different origins. We put 30% of revenues back into the business invested as R&D and the 60 staff that are Panda Labs,” he said.