Trend Micro began 2004 with a bang, reporting revenue of US$126 million, a 25 percent increase in sales in both North America and Europe — and $11 million more than the antivirus and Internet security software and services company originally estimated.
That growth came on the heels of some well-publicized malware, a growing awareness of security issues among consumers, and corporate willingness to spend precious IT dollars on securing networks. But Trend Micro did not rest on the publicity surrounding many of today’s viruses and worms. The company continued to expand its offerings to the home and small-business user, as well as unveil new products designed to further ease the management challenges facing IT executives.
For example, as part of its Enterprise Protection Strategy, the Tokyo-based company unveiled Trend Micro Network VirusWall 1200, an outbreak-prevention appliance for the network layer. The developer, which has U.S. headquarters in Cupertino, California, improved Control Manage 3.0 and Vulnerability Assessment, which allow network administrators to identify and isolate vulnerable or infected computers before they impact the enterprise.
On the home front, the company showed off some of its consumer network products at Cebit in Germany. Working with gateway and router partners, such as Accton Technology, Arcadyan Technology, Billion Electric, Hon Hai Precision Industry Ltd. and ZyXEL, Trend Micro hopes to secure the burgeoning home-network market. The company expects home network security products bearing its technology to become available in the third quarter of 2004.
In October 2003, Lane Bess, who joined Trend Micro in November 2002, was named president of the company’s North American operations. Bess, who has 20 years experience in sales, marketing and general management, previously held positions at NCR and AT&T. During his career, he has seen virulent network attacks, industry consolidation and pressure from corporations to simplify and streamline the process of managing, controlling and upgrading antivirus and security solutions.
Bess spoke recently with the E-Commerce Times about his new role, Trend Micro’s latest technology announcements and the state of the industry.
E-Commerce Times: What do you make of Trend Micro’s record first quarter and fiscal 2003?
Lane Bess: I’d like to think what we’re seeing here is a strengthening of confidence. This is now my sixth full quarter essentially running sales. This is the sixth straight quarter [of growth] in a row. A lot of that isn’t because of outbreaks. It’s because we’re nipping at the heels of our larger competitors.
In the third quarter last year, we announced an SMB product. We’ve seen two quarters of strong performance by the product. It’s really been very promising. It has me kicking myself that we didn’t add that market sooner!
ECT: You’re also addressing security inside the network with one of your new products?
Bess: Our strength being traditionally in the enterprise virus space, the Network VirusWall product is what’s going to catapult us to the next level. Almost a year ago, we started having intense feedback sessions with some of our customers — Fortune 500 companies.
We needed to address some problems they were facing with regulating a lot of unknown computers coming into their network — remote conference rooms, WiFi connections at a coffee shop and so on. That was a major concern and demand coming from enterprise customers — attacks coming at the enterprise-network layer as opposed to someone who opens an infected file.
We departed from the traditional view of building a software product that was going to protect everything at the gateway server and protect everything from inside of the network. It has a box — a hardware component — to it. To get this at the network edge, we went down the path of introducing Network VirusWall 1200. We now have a solution that can inspect or see a device as it connects to the network, see if it’s clean, lop off that device — not authorize it, if necessary.
We became part of Cisco’s Access Control Initiative back in the fall time frame. It’s altogether going to provide a very tightly integrated solution with Cisco-powered networks. If you have a Cisco-powered network or a Juniper-powered network, you’ll be in great shape.
ECT: And you also got into appliances with GateLock 3000 and GateLock 5000.
Bess: There’s a movement to solving security problems and virus problems at the network level, not just the application level. It’s more to work on a best-of-breed application. It’s not a statement that we’re going to get into box-making. Long-term, if there are companies out there that want to OEM our technology, we’ll certainly consider that.
We have a blueprint for our customers and noncustomers as well. This is really phase three of it: [We had] outbreak vulnerability prevention, damage cleanup, and now we’re entering vulnerability assessment and prevention at the network level.
ECT: How has the recent spate of viruses impacted Trend Micro customers?
Bess: For the most part, our customers have not really been terribly affected by these e-mail viruses. E-mail viruses are easy to deal with compared with network viruses.
[Recently], I was down in Atlanta with the CIO of a large company. I try to have these types of meetings fairly regularly because I want to find out what’s on their minds and what they fear. At the request of the board, he was asked to give an update on what is the next point of vulnerability. The network viruses are their biggest worry. The other thing he spoke highly of is, “How do I mitigate my risk on the network? How do I manage my risk?”
ECT: How much does Network VirusWall cost?
Bess: Pricing will vary. It begins at US$5,995 per box and about $30 per user (at the 500-user level). The hardware’s a facilitator. For our larger enterprises, obviously, there’s an accelerated discount structure.
Customers are now telling me to stop talking about TCO. They say, “Talk to me about the savings of damage and downtime.”
One salesman was trying to convince a very large global company to sign a contract with us. He put me on the phone, and in a matter of three minutes, it [seemed] so absurd to this CIO that we were talking about pennies. It was one of those things where you’ve got to see the forest for the trees.
ECT: And how do SMBs compare with enterprises in this?
Bess: It’s a bit all over the map. In the SMB, they see the forest really quickly because they see the damage could cripple their business.
ECT: What advice would you give CIOs regarding security?
Bess: We believe they need to have protection at the gateway and the server. Do not be lulled into complacency about having protection at your desktop, because it still offers a lot of opportunity for damage. They need to make a complete assessment of the construction of their network — the application layer, but also the network layer.
That’s one of the real opportunities for a value-added reseller to offer. It literally honeycombs the enterprise against these network worms.
[Also], they should look at how strong the support and response of their vendor solution partner will be when an outbreak takes place. There’s an alarm that takes off around [Trend Micro] worldwide — it’s like the building’s on fire — and, within minutes, if not seconds, we’re on the phones.
If you do relegate your security to a smaller, lesser-known company, you may not have the support when something bad happens.
ECT: What about spam?
Bess: In the spam space, there’ll be a lot of consolidation. Companies that have not been executing well with their [anti-spam] products will sell off portions of their business. It will be an interesting year.
ECT: And looking ahead?
Bess: The problem, unfortunately, isn’t going to go away. My biggest fear is you’ll see corporate espionage start to appear. It’s not just about the latest e-mail virus anymore.
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