Cam Schinham, from Panda Software, says that "computer security is one of the most worrying issues of our time, and it seems that it will become increasingly so, because since 100% security does not exist, the damage that companies and individuals suffer each year is tremendous."
The company plans to grow and gain a larger market share in countries with high potential in the sector.
-What is the current state of the global antivirus market? Computer security has recently become a hot topic.
Indeed. According to IDC (one of the world's leading providers of industry analysis and market research), global economic damage caused by viruses, worms, and other malware in 2001 amounted to $13.200 billion. Given the number of new products released each year and the simultaneous emergence of new technologies, by the time the risks of one product are understood, it's already obsolete, and a new program or product must be developed.
Almost all information transferred from PC to PC is done via email and through local or wide area networks (LANs and WANs), which means that 90% of virus infections are spread this way.
On the other hand, we have seen that, in recent years, there are increasingly more viruses using new technologies, for example, Trojans, worms, script viruses and lately, viruses that use multiple technologies to infect, such as Klez, Nimda, etc.
It's important to consider, among other things, that a major rollout of new products is planned in the field of mobile communication. For example, hybrids combining PCs, PDAs, and mobile devices, such as smartphones, will have increasingly advanced operating systems, making the dream of fast and easy mobile internet access a reality. Furthermore, there's a strong push to promote the use of instant messaging. I have no doubt that some virus authors will focus their efforts in this direction, forcing antivirus companies to develop and provide effective protection for users of these new products.
-How and why did Panda Software's international expansion begin?
Panda Software was founded in 1990 in Bilbao and initially offered solutions for local viruses. It grew rapidly. In 1993, it opened an office in Madrid, followed by others in Barcelona and Valencia. Between 1995 and 1996, Panda Software was the industry leader in Spain, and the management team began planning its next steps: accustomed to doubling its revenue every year, such a growth rate would be difficult to maintain by limiting sales to Spain. For this reason, in 1997, they decided to embark on a very ambitious international expansion project.
Given that the world's largest IT market is the USA (worth over 500 billion euros annually), it is logical to think that the first step decided upon was to establish a subsidiary there, in California.
At the same time, Panda Software began attending international events, computer fairs such as CeBIT in Hanover, which provided good international contacts, especially distributors or "resellers" outside of Spain or the USA.
-What have been the results of this expansion?
The results have been excellent. To achieve this, Panda developed the system we currently use, which is a franchise system. Through this system, the franchisee receives exclusive rights to develop the Panda Software business in their country. This exclusive representative, or "Country Partner," as we call them, is dedicated solely to marketing and selling Panda's products and services, assuming, in exchange for exclusivity, a commitment to achieving marketing and sales targets. And it really works.
At this time, we have exclusive representatives ("Country Partners") in more than 45 countries and we sell through resellers and distributors in another 40.
-How would you rate the company's experience in Central and Eastern European countries? What is the level of development of the Information Technology markets in these countries?
Panda Software had its first experiences in Central and Eastern Europe, through its exclusive representatives in Lithuania and Slovakia in 1997. In 2001, we closed exclusive representation agreements with companies in the computer sector in Slovenia, Bulgaria, Hungary and Poland, and in 2002 we entered Romania and Latvia, thus completing this expansion cycle.
There is no doubt that it is now easier than before to do business in these countries, and with their incorporation into the European Union it will become even easier.
It is true that we have sometimes encountered certain "barriers" in these countries when trying to find a Country Partner willing to assume the commitments and risks inherent in any new business. Since private ownership and market liberalization are still recent in this part of Europe, there have been, and probably still are, greater difficulties than in Western Europe in finding capital to undertake new projects. Equally, or perhaps even more importantly, economic and legal instability in some of these countries have been two key factors in evaluating a new business venture.
For any software company looking to do business in Central and Eastern European markets, there are several factors to consider. For example, software translation into the local language is essential. It's important to keep in mind that price is highly sensitive; it often seems to be the primary criterion for many users. Furthermore, in some of these countries, distribution channels are not yet as well-established as in our region, and sometimes a link in the chain is missing (the wholesaler sells directly to the retailer, for example). Or there may be liquidity issues and payment defaults.
Another issue is payment methods, as credit card use is not widespread. Direct marketing is also underdeveloped in these countries, due to the aforementioned payment method issue, the lack of adequate legal regulations to protect catalog and online shoppers, and a preference for face-to-face interaction with the seller.
Regarding the level of development of Information Technology markets in this part of the world, Slovenia, Czech Republic, Hungary, Estonia and Slovakia are the most advanced, while Romania and Bulgaria are the least, and Poland, by far the country with the largest population (almost 39 million), is between the two extremes.
The reality is that if we compare the five most developed countries in this region with Spain, we see that their levels of IT development are not so different from Spain's. For example, their annual investment in IT is between 30% and 58% of Spain's, they have between 75% and 100% of the number of PCs per capita (Slovenia has more PCs per capita than Spain), and almost the same internet usage figures as Spain, except in the cases of Lithuania and Poland. However, the same comparison with Romania and Bulgaria indicates that their level of IT development is between 10% and 20% of Spain's.
However, if we make the same comparison with the figures for Western Europe instead of Spain, we will see that the differences are even more marked.
-Is this a sector to consider for foreign investment, in this case, Spanish investment?
I would say a resounding "yes." The reasons are simple. Since there is a considerable difference in the levels of development of the IT sector between Western Europe and Central and Eastern Europe, as these regions join the European Union, there will be significant investments from the EU itself, aimed at increasing development levels in many fields, with IT and telecommunications being priorities among them.
This, in turn, will attract more private direct investment, and together, these investment flows will produce significant growth in these markets. We can say that the greater the difference in development levels, the greater the growth we will see.
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