It might have seemed absurd to Eugene Kaspersky when he first founded Kaspersky Lab back in 1997 that he would one day find himself plastered on billboards across Asia, posing with megastar and stuntman Jackie Chan. Or that he would be starring in a TV commercial alongside Chan who shows off his lithe moves to fight off a horde of malware programs while wearing a Kaspersky helmet and riding on a Kaspersky Segway.

As Moscow's answer to stave off cyber criminals, Kaspersky was never keen on investing heavily in advertising or marketing strategies. He recalls five to six years ago when people were telling him to throw his dollars behind mass marketing.

"I said no. We have to invest in technology. At that time, we were not known. We had no marketing muscle and not enough resources. Our revenue was only US$2 million to US$5 million a year," he says.

Those Jackie Chan ads probably paid off when he received the National Friendship Award in September last year from the Chinese government -- among the highest honours granted to foreign experts -- for his contribution to the information security landscape.
Kaspersky Lab, which ventured into the Chinese retail market in 2003, is also one of the largest antivirus vendors there.
Last year, it managed to secure the contract to be the sole antivirus vendor for China's 11th National games.

With malware testing labs in China that employ 100 people, Kaspersky Lab is increasingly expanding its footprint in China and around the world. According to Kaspersky, 60% of its revenue comes from the consumer segment, 30% from enterprises and the remaining 10% from technology licences to bundle its products with PC makers.

In 2008, the company saw US$381 million in sales volume, including bookings. While its cash cow markets are still in Western European countries such as Germany and France, it is fast catching up with its competitors in other markets such as the US and Asia Pacific.

So far, Asia Pacific has presented Kaspersky Lab with good growth overall. It is No 1 in the Indonesian consumer segment after only two years in the market. In the US, its market share is closing in on to No 3 player Trend Micro, which is behind McAfee and Symantec.
Kaspersky attributes the healthy growth experienced by the company to the fact it spent the early years investing in technology and building a large team of experts.

Of its total workforce of 1,500, 700 are security experts. The company's 25 to 30 high-end security experts spend some of their time travelling around the world to educate and build the brand globally.

However, 80% of its research and development still takes place in Moscow. Taking advantage of globalisation, the various malware labs set up in China serve as a testing ground when the programmers are sleeping in Russia.

"We compile a new version every day in our software development process. At the end of day, the engineers in Russia will compile the codes and send it to testers in China. In the past, we had everyone in the same time zone. So now that we have China, the Russians go to sleep and then China wakes up to run the tests. When the Russians wake up, it's done. But we still have four hours' difference, which is the overlap for everyone to communicate and sync up," says Kaspersky.

Putting the testing labs in China is also a good move as a lot of the malware attacks come from websites there. According to Kaspersky Lab's Malware Miscellany Report for September 2009, 26% of the malicious websites in its list hail from China.

But Kaspersky feels that the best cyber criminals still come from Russia due to the country's sound technical education system. Perhaps with a slight tinge of national pride, Kaspersky says Russian developers write some of the most sophisticated codes he has seen.

Cyber criminals have also grown more sophisticated over the years. When he first started out 13 years ago, the perpetrators consisted mostly of high school kids and university students who craved their 15 minutes of fame by hacking into top-secret government agencies. "It was just for them to impress their girlfriends," says Kaspersky.

During those times, he says, a few industry players perceived that anti-malware products would soon become a commodity. "They said that the problems have been solved and the anti-malware products would all be similar. The only thing different would be the marketing."

But Kaspersky was vindicated when a slew of global threats surfaced five to seven years ago. For example, the "I Love You" worm, which reached its peak in 2003, infected almost 50 million computers. The criminals have upped the ante and the message to the rest of the world is clear: security is important. Now, the motivation isn't just personal infamy, it is money.

"There are attacks almost every week. To me, this is a sign that we were right to invest in technological armory. We managed to license a lot of our technology because many companies suddenly understood that they needed sophisticated technology," says Kaspersky.  
Banking on technology, he says the next vulnerable area is smart phone security. Although the smart phone segment is not making any profits for the company, it is still investing heavily in this area.

"If a company is focused on ROI (return on investment) and profits yearly, it wouldn't be paying attention to this area. The big players are not doing this because it won't generate cash. Not yet. But it certainly will five years from now," he says.

Another weak area he sees is in the data linkage prevention (DLP) sector, which covers data in use, as well as in storage. Because businesses and governments deal with large volumes of sensitive data, there is a need for products that will prevent any breach of security. Sensitive and private data is sold in the black market for thousands of dollars.

This is in line with the company's effort to increase its enterprise segment contribution to the bottom line. Kaspersky feels that the small to medium enterprises will find it more difficult to manage their security, as the attacks will not just be for monetary gains but also for malware hosting.

"Their [SMEs] security will be moving from in-house to having a third party come in to manage. Firstly, they [criminals] might want to steal. But if you have nothing, they will use your system to send spams. They will own the system and run attacks on behalf of you or watch for confidential data," says Kaspersky.

With a tendency of going against the grain, Kaspersky is confident that the company will continue to grow. After all, he had to venture out of Russia to capture the Western European markets when Kaspersky Lab first started due to the small home market then.

If starting an international business was interesting for him then, so is expanding Kaspersky Lab's market share now. He thrives on the challenge of winning over customers.

An avid climber, he especially enjoys conquering volcanoes. One of his favourite places to climb is a region called Kamchatka in East Russia. Kamchatka has about 150 volcanoes, 30 of which are still active. The last time he was there, the volcano he was climbing was threatening to erupt - which gives him a thrill.

Another thing that gets him excited is that the company  performed better during the recent global economic downturn and is sittting on sound technology solutions. Recalling the early lean years of Kaspersky Lab, there is a sense of triumph in his voice when he says, "Now we are able to have Jackie Chan advertisements everywhere."

This article appeared in netv@lue2.0, the technology section of The Edge Malaysia, Issue 789 Jan 18 - 24 2010