Kaspersky Lab launches plan to double Brazil revenues

The security firm is investing in the expansion of its presence in one of its key markets

Russian security vendor Kaspersky Lab has launched a strategic plan for Brazil that includes localizing key business functions and increasing management autonomy in order to double its revenues in the country over the next three years.

To reflect the "substantial" growth in Brazil - the company saw a 10 percent increase in B2B sales in 2014 - management in the country will now be reporting directly to Russia rather than the Latin America business division.

The firm has also boosted its data and communications infrastructure and its São Paulo base has doubled in size to accommodate the expected increase in business, with dedicated facilities for training, product testing and customer care.

Kaspersky's growth plan is totally independent of "temporary economic challenges" that the country is currently facing, according to the company's director general for Brazil, Claudio Martinelli.

"It is important to stress that any economic fluctuation in one quarter or another does not interfere with our growth plans for the long term," Martinelli tells ZDNet.

"These plans involve bringing to Brazil services and [product] features that were usually shared with Latin America and other regions and that are now located in and run from Brazil."

Without citing investment figures, Martinelli says the Russian company will focus on boosting its local resources in functions such as engineering, technical support and marketing, which were run remotely by the global team up until now.

"It is clear to us that [Brazilian] companies will buy more security services and we are making investments that are aligned with those needs, to provide them with technical support, consulting for implementations, systems conformity and risk analysis - particularly for large enterprises," the executive says.

Organizational changes

According to Martinelli, the growing presence of the company in Brazil meant that it made sense for Kaspersky to have separate divisions for what it calls "Spanish Latin America" and "Portuguese Latin America" - meaning Brazil.

That way, the company believes it will be equipped to meet the specific needs of the Brazilian market faster and more adequately since the country's needs to foster growth differ from the rest of the Latin American markets.

"The common practice of companies to put Latin America under the same geographic division in organizational terms has been our reality too over time, given the similarity that exists between the Latin American countries," Martinelli says.

"However, there's a certain point of maturity where the company has already developed a significant presence and adaptation to the local market that it becomes necessary to be more specific and aligned to the needs of each region," he says.

Any economic fluctuation in one quarter or another does not interfere with our growth plans for Brazil in the long term

— Claudio Martinelli, Brazil director general, Kaspersky Lab

Following the organizational changes, the other Latin American countries will continue to report to a single business unit. However, Martinelli points out that Kaspersky is aware of the differences between the latin markets, so some of these markets have also gained a certain degree of autonomy.

"Even though the other Latin American countries remain within the same business unit, it is important for them to be understood as a region that has different cultures and market peculiarities," says Martinelli.

The fact that Brazil has gained autonomy within Kaspersky is related not only to the positive sales performance in the country but also the strong e-commerce growth.

"Online commerce here is very mature and strong and the [business] volumes seen in Brazil are very different to other, smaller Latin American countries," the executive says.

"Brazil has not only become very representative within the Latin region in the last few years, but also for the organization as a whole: we understand that Brazil has a potential for growth that is superior to other regions in the world," Martinelli adds.

Business opportunities

Security investments have been small in Brazil until recently, according to Martinelli. The Kaspersky executive adds that this is now growing and all the attention that the country has been getting in the international media due to the World Cup and the Olympics has also attracted the attention of the cybercrime community - which is a problem that also creates more business for the company.

"It is natural that companies have started to get more concerned about their security investments and that more opportunities around investment will be found in Brazil in relation to the world average," Martinelli predicts.

In terms of target customers, Kaspersky is looking to generate business with multinational companies with a presence in Brazil, but also local companies.

"Many Brazilian organizations are looking to follow global security practices, bringing a type of investment behavior that was not very common," Martinelli says, adding that that Brazilian enterprises would typically invest half the world average of 5-6 percent of the IT budget in security.

However, the security market in Brazil also has a range of well-established competitors such as Symantec, McAfee and Trend, all claiming a slice of that security pie, but Martinelli believes Kaspersky has what it takes to further establish its brand in the local market.

"It is a competitive space, but one where only a few [suppliers] have the service and solution capabilities that we offer in order to cater for individual and corporate consumers of any size, from small and medium enterprises to large-size corporations," Martinelli points out.

We understand that Brazil has a potential for growth that is superior to other regions in the world

— Claudio Martinelli, Brazil director general, Kaspersky Lab

"Kaspersky Lab is the largest private company totally focused on digital security - this is our strength, our differential. We have a cybercrime division that has more than a thousand experts focused on solutions in that area, so our investigative work and development activities that are extremely focused on cyber threats does set us apart," he adds.

The main challenges facing the Brazilian division of the security company, according to its country head, are less to do with what the company considers a temporary economic downturn and more to do with creating a culture of proactive data security.

"A key challenge is around businesses' ignorance regarding those threats or what should be done so that companies can protect themselves: many honestly believe that the lightning will not fall on their heads, then relegate digital security to a second tier department or less strategic importance," Martinelli says.

"Also, there is no legislation in Brazil regarding cybercrime that protects customer information and requires companies to protect customer information, so it's all very vague. But discussions around the theme are happening and change is definitely taking place," the executive concludes.

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