Kaspersky to hike market operating price by 10%

Having penetrated the Indian market successfully, Moscow-based anti-virus and
internet security vendor, Kaspersky Lab is now looking to hike the prices of its
products for a second time. The hike that is likely to come into effect from
2010 onwards will be not more than 10 percent for its reseller partners in
India. In addition, Kaspersky also has extensive plans of revamping its existing
channel model and enhancing its focus on the business and corporate segment to
penetrate the market further.

Talking about its go to market strategy, Alexander Gnatusin,
Director-Channels, Kaspersky Lab shared, “We have massive expansion plans for
the Indian market and by end of October 2009, we will have set up a local sales
and marketing team in addition to appointing technical staff. We will have a
team of approximately 10 employees including a channel manager for India. We
have witnessed huge growth in India and FY 2008-09 saw us registering almost 100
percent growth in India. Globally we grew 70 percent. We are now targeting the
same growth figure for the coming financial year as far as India is concerned.”

When questioned about its pricing structure that is low in India compared to
its prices globally, Gnatusin pointed, “It was a conscious decision taken by us
to penetrate the market. Now that we have established our footprints in the
country, we may look at hiking the prices of our products gradually. In June
2008 we had hiked the prices of our three user anti-virus in India and by 2010
we will bring about a further change in the pricing structure by hiking the
price in the range of not more than 10 percent for our partners here. While the
MRP for end customers will remain the same, it is only the market price or the
market operating price that will go up. However, at the same time we don't
intend to discourage our partners and hence we will introduce special bonus
schemes simultaneously so that our partners can continue enjoying decent margins
from the sale of our products. Besides a major portion of our revenues will be
spent of brand awareness and marketing activities in India.”

As reported in The DQ Week earlier, Kaspersky Lab, Moscow had instructed its
distributor (Zoom Technologies) in India to double the distributor prices of
three-users to

Rs 752 by June 1, 2009. This decision was taken in view of the fact that its
three-user software was being sold by the Indian channels in large quantities
outside India, including Middle East, Singapore, Europe among other markets,
which in turn was affecting Kaspersky's business in other regions.

Apparently, distributors in India were reselling software products to
distributors across other countries at lower prices given that there is a wide
gap between the India distribution price and the price that the vendor has
internationally. In order curb the above practice Kaspersky has now started
installing IP filtering technology in its products. Added Gnatusin, “The IP
filtering technology ensures that even if a global customer purchases the
product in India or from an Indian channel partner, he will not be able to
activate it and get updates.”

Kaspersky is also looking at bringing about changes to its existing channel
structure. In the beginning of 2010 the vendor is looking at appointing yet
another master (national) distributor in India. Currently Hyderabad-based Zoom
Technologies is its only national distributor in India. “We may also look at
having state wise distributors or a model wherein we will have separate
distributors to further corporate and retail products available from us.”

Sharing details around its product portfolio Gnatusin quipped, “We are
closely observing the notebook penetration across the globe and while most of
our products are already in India, we might add some anti-virus Internet
security product specially developed for the netbook range of products. Until
recently we had been concentrating on the retail segment in India but in the
coming financial year, we will shift our focus towards business and corporate
segment as well. This is in view of the fact that SMBs and SMEs have started
realizing the relevance of having a strong security solution to protect their
businesses.”