Kaspersky Repositioning for Renewed Growth

Eugene Kaspersky, founder and CEO of the Russian security company that bears his name, is stepping back from plans to take the vendor public. Instead, he’s refocusing the company with aims of becoming the #3 security vendor in the U.S.

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Kaspersky Lab, the Russian bear of security software, is looking to expand its global footprint and take the #3 market share slot in the U.S. without going public in the process.

Eugene Kaspersky, founder of the company that bears his name, told industry analysts at a conference in Cancun that he’s backing away from IPO plans. Instead, he’s planning to buy back the 20 percent stake sold last year to private equity firm General Atlantic and refocus the company on growth and profitability.

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Kaspersky’s rationale is simple: Remaining private enables him and the Moscow-based management team to retain unrestricted control of the company’s operations and strategic direction, and preserve the company’s entrepreneurial culture.

Culture preservation is a recurring theme for Kaspersky, who founded the antivirus company in 1997. Kaspersky Lab is set up for organic technology development and growth. Rarely does Kaspersky acquire companies, instead opting for licensing technology it cannot develop on its own.

"It is flexible. It is very, very innovative," Kaspersky told analysts, according to the Reuters news service. "I like it. I don't want to change."

Over the last decade, Kaspersky has grown from a regional antivirus company confined to Russia and Eastern Europe to a global player in multiple security software technologies. It’s the fourth largest security company in the world behind Symantec, McAfee and Trend Micro. And it’s threatening to overtake Trend Micro in several key markets and global share.

A significant part of Kaspersky’s success comes from its channel relationships and burgeoning partner network. SMB and security solution providers have been lured to Kaspersky by its generous margins and ample field support. Kaspersky is one of the few security vendors that offer partners in-country, native-language support in all its territories.

Corporate culture, Kaspersky often credits, is a significant contributing factor behind the relationships Kaspersky Lab has with its reseller partners. And, if asked, the company would likely say that culture will also be a factor in its drive to overtake Trend Micro in the U.S. market.

Kaspersky’s rise in the security market and channel has given competitors reason to pause. All of the major security vendors actively monitor Kaspersky’s sales, customer engagements and technology development. Some competitors even charge Kaspersky’s growth is a result of undercutting prices. While Kaspersky officers have repeatedly denied undercutting prices, partners say it’s a common practice.

By remaining private, Kaspersky Lab will retain the ability to operate the company the way it wants. Management told employees via email that it would become more fiscally disciplined, while simultaneously investing in growth targets. Kaspersky’s track record would lead to one conclusion: investment in the channel will not suffer under any reorganization. The greater chance is Kaspersky will lean more heavily on partners in future endeavors.

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