Simplicity in democracy

Kaspersky Lab is an international IT security group that operates in more than 100 countries worldwide with its corporate HQ in Moscow from where it oversees global operations and business development. However, unlike most of the centralized companies, Kaspersky follows the decentralized model operating across the globe with 5 different entities catering to the geographic breakup. These are: US division catering to the US and Canada; EMEA; UK & rest of Europe; APAC and SEA. The India division comes under the SEA division.

Kaspersky Lab currently employs over 2,300 highly qualified specialists. The company has its own territory offices in 29 countries and its products and technologies provide protection for over 300 mn users worldwide.

In India, the company has primarily broken up its distribution segment into 2 divisions, namely, mobile software and enterprise soft­ware appointing NDs along the line of regional ones. Although the company hasn't made any official announcement regarding the RD structure, the way it operates clearly hints to the RD model being in place.

On the mobile software front, it has Sakri IT Solutions and Xastel as its NDs while on the enterprise distribution front, it has appointed Sea Infonet, E Cap, Comguard and iValue Solutions as 4 NDs. Although all these are regional in nature, Kaspersky has not laid down strict geographical boundaries or consumer divisions for them. For eg, Kolkata based Sea Infonet can easily bill partners in Delhi or Chennai as the company has refrained from resorting to exclusiveness amidst its distribution model.

On the partner front, Kaspersky has differentiated a three tier partner classification based on capabilities, both in terms of finance as well as technical scale.

Under the Star Partner program, the three levels of partners are Platinum, Gold and Silver. The company presently has 14 stable Platinum partners and for the time being is in no mood to expand the present base of the Platinum segment. Gold partners account for over 200 across the country and the Silver slot comprises over 10,000 partners. Presently the company is targeting to expand only the Silver partner base and upgrade the existing ‘good performance' Silver base to the Gold one.

For the Platinum category, the ability to have and drive the technical staff besides a strong sales force is the primary criteria. For the Gold category, Kaspersky has appointed partners based on their capability to invest as well promote the brand and the product. Lastly, for the Silver partners, the company is ready to certify and appoint partners who are ready to invest some amount of money and have passed the online certification test.

However, the most unusual feature this company has is in the realm of decision making. While most of the biggies in the anti-virus space and other new entrants follows the dictatorial pattern, ie, making the decision at the board level and implementing it through the channels, Kaspersky holds quarterly meetings with its partners to deliberate over their marketing, sales and channel strategy-a feature deemed to be quite uncanny with the existing channel players. Also, review of the policies is done at this stage.

In this way, the company not only gives its channel partners a strong dais to voice their opinion when making the sales strategy, but also makes them equally responsible for the success or failure of a given and approved strategy. In terms of organization set up, Kaspersky's India division has its HQ in Hyderabad but the company will be shortly shifting it to Mumbai. The team is headed by Altaf Halde who is the MD and Jagannath Patnaik as the director, channel sales. This top managerial level is followed by the channel managers in the enterprise and the retail segment (breaking up the geography as West-South and North-East) with the local sales teams at their disposal.

Over its sales front and the consumer segment, the company has its primary revenues coming in from the retail (end-user SOHO) segment which accounts for nearly 70% of its annual revenue followed by the SME segment contributing 20% while the enterprise segment accounts for the remainder of the revenue.

In terms of regional revenue distribution, the company is unique to competition. Kaspersky, unlike other anti-virus vendors, claims to have an equal share of revenue at 25% flat from all the four regions. This sales figure hints at the need for holding annual as well as quarterly seminars and the company successfully addresses the same.

As far as accreditation is concerned, every partner has to resort to the online test module which is applicable globally followed by local technical training programs held in association with the Gold partners. For its meetings and reward programs, Kaspersky conducts channel meetings at regular intervals across 19 cities in association with the distributors or Gold partners. Incentives has been a key driver for sales figures in channels since the inception of IT in India. Kaspersky too follows the same structure based on the point system. The company doles out points to its partners based on total sales volume. On collection of a certain slot of points, the partner can redeem the same for gifts and other perks offered time to time. Also, occasionally, the company comes out with ‘scratch and win' offers for its end-users.

Over the support front, the company has the policy to delegate its distributors for the primary and the middle level support. It is only for acute cases that the company involves directly with the client based on the recommendations of the distributors or the Gold partners. However, Kaspersky will shortly be coming up with an enhanced tech support team after the relocation of its Indian HQ in Mumbai.

With its existing ‘democratic' channel structure in place, Kaspersky has posted an estimated annual turnover (DQC estimate) of Rs 58 crore in the last FY and is optimistic about growing by 100% this FY. Also, it is targeting at least 16% market share in the security software space in India by this end of FY 10-11.