Market Analysis: Network security, securing business

cctv.com 12-03-2003 12:50

With 10 million new computers sold every year, China is now unassailably the business center for the IT industry worldwide. However, only ten percent of computer users in China purchase and install anti-virus software, proving China to be a very immature network security market. The more rampant and complex viruses become, the more people nowadays are aware of network security. In today's market analysis, we will take you to explore this significant market and witness the fierce competition between different vendors.

The first six months of this year were unprecedented for rampant Internet viruses, causing a startling 28 billion US dollars loss worldwide. Thus as the Chinese release in the office of Symantec, one of the biggest foreign software vendors in China, drew special attention. Mr. Zheng, the managing director was interpreting the latest model of Internet threat, and explaining how to distinguish different kinds of attacks.

Daniel Cheng, MD of Symantec Information Technology (Beijing) Limited

"This report is called internet security threat report, actually we get a lot of information within the six months, and we think it's worthwhile to share with our customers, because we found out that there's lot of threats attacking the computers worldwide, and lot of companies they don't really understand how to protect themselves, and what kind of threat they are in the world right now."

With the rapid growth of computers in China, Internet users are expected to reach 180 million in 2007, first in the world. However along with the popularization of computer use also come viruses in more complex and destructive forms. Data shows that the infection ratio of Internet users in China has reached 85 percent this year, thus there is no time to delay in the protection of network security.

Sun Jiaguang, Professor of School of Software, Tsinghua University

"As we move into the information age, if information security can't be ensured, then people can't receive the right information, and what's more, useless information and information affected by hackers will destroy our daily work and life. So a lot more importance is being attached worldwide as to how to deliver the right information to the right person at the right time, and of course, in the right way, and this should be a global concern."

To individuals, network security probably just means delivering the right information to the right person; however as a global affair, network security means not only the efficiency of work, but also money, and even life.

Sun Jiangguang, Professor of School of Software, Tsinghua University

"If you don't have network security in a large enterprise, there is no guarantee for your personnel, market, product designs, and other information, your stuff may be lost to others. So everyone attaches great importance to this. Bosses especially always worry about the lost of their financial information and design information."

Jason Huang, Sales Director of Symantec Information Technology (Beijing) Limited, said, "If data is lost, destroyed, or even stolen, then there will be a great loss for enterprises. In case of slight loss, production may be halted, for heavy loss, it may lead to legal disputes."

Symantec, founded in 1982 in US, is a software vendor providing a broad range of network security software and appliance solutions for all kinds of Internet users. However since its entry into China in 1998, Symantec has targeted mainly large-scale enterprises and service providers, and in the past five years it has witnessed growth in this market on a rapid scale.

Daniel Cheng, MD of Symantec Information Technology (Beijing) Limited, said, "As you can see, I came in China in 1998, at that time if you were trying to find a network, or an environment of network, it's very rare, and after three years or four years, all companies is networked together already. And if you look at the Internet users, when I first came in it's only about three hundred thousand users, how about now? It's over maybe 40 million."

Jason Huang, Sales Director of Symantec Information Technology (Beijing) Limited, said, "Since our entry into China in 1998, our sales have increased greatly. Not by percentage, but several fold. Because of the enhancing of the concept of network security in China, people have higher expectations of network security products."

However, protecting networks is not an easy thing. Instead of the simple virus attacks of several years ago, nowadays Internet threats have become blended attacks, combining viruses with hacking. Thus the software vendor needs to provide clients with not only virus protection, but also firewalls, intrusion detection, e-mail filtering and the like. Symantec is just one company that is particularly strong in providing a broad range of content and network security software and appliance solutions. Therefore it now takes up 18 percent of the market in network anti-virus software, leading this market in 2002.

Daniel Cheng, MD of Symantec Information Technology (Beijing) Limited, said, "We can see that since China has 1.3 bn people, it's much bigger than us in every wide, and if you talk about provinces, if you want to do business, you can go to thirty different provinces, and do business. So the market is huge, so we believe that in the coming three to five years, if we can establish our name in China as a trusted security vender, we'll have a bright future."

Network security is not just something these large enterprises are aware of, now more and more retail customers are also coming to realize its importance, and they currently account for a major part of this market in China.

Feng Xin, SUG Marketing Supervisor of Kingsoft Co., Ltd, said, "In those countries with a mature IT environment, there is a Two-To-Eight rule in the information security market: that is, 20 percent are private consumers, and the other eighty percent are enterprises. However I've read a study saying that at least up till the end of 2001, the Two-To-Eight rule was reversed in China, that is, 80 percent were private consumers, while only twenty percent of the market was for enterprises."

The PC market in China is currently maintaining a fast growth rate of 10 million new machines every year, and although only ten percent of these tend to purchase and install copyright anti-virus software, the absolute number still makes a big cake for every software vendor. With lower costs, more distribution channels, and existing customer groups, many domestic vendors are now moving into this field, Kingsoft among them.

Wang Guoquan, Vice President of Kingsoft Co., Ltd, said, "In recent years, with the popularization of Windows 95, viruses have been especially rampant, and the impact of viruses has been more and more severe, so we think this is a market with great customer demand."

Feng Xin, SUG Marketing Supervisor of Kingsofr Co., Ltd, said, "Anti-virus software was a lucrative market then, because the biggest threat in China's software market at the time was counterfeiting; by contrast, in the anti-virus software market counterfeiting was not a problem, because no one dared to kill viruses using counterfeited software."

Although many people tend to buy copyright software, the price at that time was still too high for ordinary people. In the U.S., the price of anti-virus software is as much as a book, and in Japan it is almost the same as typing software. So after an overall investigation of the world anti-virus software market, Kingsoft sharply cut the price of their latest anti-virus software from nearly 200 RMB to 50, the same as a movie ticket.

Liu Jinguang, Product Manager of Kingsoft Co., Ltd, said, "Duba V started to be sold on June 15th, and our sales that day broke the record in the field of anti-virus software, reaching 1.08 thousand RMB. Up till now we have sold 300 thousand sets. "

"The sales volume for the whole market is between 1 and 2 million, and we take up forty to sixty percent of the market share. "

The ten million new computers sold every year in China might be seen as an astonishing figure, but a more astonishing one is the 20 thousand new viruses detected on the Internet annually, so the ten percent installation rate for anti-virus software is far from adequate. Experts predict that China's Internet users are expected to reach 180 million within four years, thus China is no doubt the fastest growing place for the network security industry worldwide. Making a move into China's network security industry will definitely secure software vendors' business.

Editor:Zhang Wenjie  Source:CCTV.com