As an organization we are growing at 30 percent YoY

We believe, that in the current and coming years we will see a significant
increase in anti-virus sales as a result of the aforementioned consumer
awareness

What is your revenue from anti-virus solutions? State its break up in
terms of revenue from the consumer and enterprise versions? Also tell us about
the growth of the company.

K7 Computing is an 18 year old Indian anti-virus solution provider, which
focuses on security space and provides security solutions to the home segment.
As a pioneer in the consumer security technology space, we have close to 10
million satisfied paid customers. As an organization we are growing at 30
percent YoY. Also with our channel and communication initiative, we are poised
to grow at a much faster pace during FY 2010-11.

What is your estimate of the anti-virus market size and its growth in
India?

There is no syndicated study on Indian consumer anti-virus market size,
hence there is no fix market size for it. On the installed base of over 30
million PC's (last four year PC sales in India), our estimation is close to 15
million PC's, which is the addressable market size in home space. However, the
tie ratio on PC with paid user is close to 40 to 50 percent, which is steadily
increasing with increasing awareness among users about the vulnerability of
unprotected internet usage. We believe, that in the current and coming years we
will see a significant increase in anti-virus sales as a result of the
aforementioned consumer awareness.

What are the growth drivers or the current market trend?

With the advent of Internet technology advancement, consumer usage of
Internet has improved dramatically by facilities like online fund transfer,
online purchase through credit card, online tickets booking
(flight/railway/bus/movie tickets) and online utility bill payment (EB,
insurance and mobile) etc. Unfortunately, this has also created a whole new
breed of online criminals and so there has been a paradigm shift from earlier
threats, which were more malignant. This has compelled the customers to protect
and safeguard their PC's with complete security solution like K7 TotalSecurity
10, which is a comprehensive solution for creating a relatively safer computing
experience on the Internet. India being one of the largest Internet user base,
the need for safe Internet experience increases day by day. Also the shift
towards free download version has trimmed down, with people now opting for paid
licensed security product.

What are the challenges?

Consumer awareness is the single biggest challenge. Yes, though the current
awareness level is increasing, it is one of the key challenges in the domestic
market category. In India, people tend to buy a PC and start using it without
even installing a security product before connecting to Internet. They realize
the importance of anti-virus upon facing the problems like data loss or system
hanging or loss via online fraud or even to the extent of system crashing. The
other significant challenge is ignorance of the customer on the difference
between the basic anti-virus protection and total security protection.
Anti-virus being a basic form of protection from virus thereat, responsible
vendors should position and highlight its limitation. For Indian home need, we
strongly recommend to go in for total security solution, which will give
comprehensive solution for the home Internet users. Though players like us and
channel partners are educating the customers on the same, price plays a major
role in moving customers towards non-secure solution which are being offered in
the market. Also being an evolving market segment, there is no laid down
specification and norm to be an entry barrier for substandard anti-virus product
getting into this segment.

What is the difference in market trends between the upcountry and metros?

Level of awareness, need for anti-virus solution and ability to get the best
brands in the market place is high in the metros. The channel partners encourage
to go in for anti-virus with a new system that avoids and limits service calls.
In the upcountry market, channel partners play an important role in recommending
the right security product. Level of vulnerability depends on the usage of
Internet. Metros are more aware and hence sale is high there when compared to
the market in upcountry.

How do you tackle piracy?

Fortunately for us there is no real issue of piracy. All anti-virus products
consist of two parts. There is a product that is installed in the PC and the
other is a service that involves daily and multiple updates to the product
ensuring that the product can guard the PC against the latest threats. A pirated
copy of the product can be used as an evaluation product that would receive
daily updates for 30 days only. After 30 days, the user will have to pay to
continue receiving the daily updates. Without the regular updates, the user's PC
would become vulnerable to the latest viruses, which come through the Internet
almost every day. When someone tries to use a pirated copy of our product, we
see him as a trial user and a potential customer for K7 TotalSecurity 10.

What are the channel plans for these products?

As an Indian player, we believe in close interaction with the channel
partners which can give us competitive edge in the market place. We have
multiple engagement programs like, continuous touch base through our dedicated
80 plus loyal field executives across India, a training program for channel
partner service engineers on the latest vulnerabilities in the security space
and a local level channel meet and quarterly incentive program. The attractive
incentive program gives us a different brand image within the channel community
giving a better chance to interact frequently. We always set benchmark with
innovative channel schemes like-trip to Bangkok and Pattaya, gold coin schemes,
laptop schemes etc. We always make sure the disbursement of the same is done in
quick time. Apart from these incentive programs, we have a training initiative
through which we train the SIs on technical aspects of security software
like-how it works, how to maximize the benefit to the customers during the
license period and also how to stay close to the customer, which is the biggest
asset of the business.

What are the market building activities that you have planned for the rest
of the year?

As a path breaker, K7 computing came up with a TV campaign in the month of
Feb-March 2010 to promote K7TotalSecurity brand and create awareness on
anti-virus solution to the consumers for the first time in the market. We have
our own marketing calendar, which looks at our marketing and sales objective for
the year 2010-11. We have completed our first round of TV, FM and digital
campaign from Feb to May 2010. We are currently focusing on the ground
activities, wherein we will be interacting with the prospective customers
creating visibility for the brand through various branding initiatives.

Ramkumar R

ramk@cybermedia.co.in