Kaspersky goes from Europe to the Middle East

Evgeny Kaspersky's refusal to cooperate with Europol was another step to reduce the presence of his company in Western markets.
18.06.2018
Forbes
Origin source
 Europe and North America account for more than 50% of Kaspersky Lab's revenue. The IT giant is trying to compensate for the drop in sales in these regions at the expense of Russia and the Middle East.

"The decision of the European Parliament is conducive to cybercrime in Europe," wrote billionaire Eugene Kaspersky, founder and head of Kaspersky Lab, on his page in Instagram on Thursday. So emotionally, he commented on the resolution passed the day before. In it, the deputies of the European Parliament declared the need to defend themselves against cyber threats originating from countries such as Russia, North Korea and China, and Kaspersky Lab products were named as potentially harmful software.

In response to the resolution, Eugene Kaspersky said about the termination of cooperation with European law enforcement agencies, including with Europol and the project NoMoreRansom (a joint project of Kaspersky Lab and Intel company to combat virus cryptographers). The decision was made, despite the fact that the resolution had no legislative force. At the same time, according to Kaspersky, "the hypocritical way in which this was done is absolutely unacceptable."

Perhaps the next step will be a complete ban on the use of the company's products in Europe. With this proposal in April this year, the European MEP from Poland Anna Fotyga. The draft resolution on countering Russian propaganda talked about the need to exclude "potentially dangerous programs and devices and prohibit those that were confirmed as malicious, such as Kaspersky Labs."

Refusal to work with European law enforcement can significantly damage the company's revenue in the region, which accounts for more than a third of its revenues. In 2017, Kaspersky Lab's revenue approached $ 700 million, which is 8% more than a year ago. At the same time, sales in Europe fell by 2%, and in the US and Canada - by 8%. The company's financial report for 2016 indicates that North America accounted for 24.5%, and for Europe - 36.5% of the company's sales. More recent data in Kaspersky Lab was not provided. Increase in revenue was achieved due to sales growth primarily in Russia and CIS countries (+ 34%), as well as in the Middle East, Turkey and Africa (+ 31%).

According to the company Opswat, specializing in cyber security, Kaspersky Lab is the ninth largest producer of anti-malware protection. In May, its share was 4.86% compared to 4.5% in August last year, when the company closed the rating.

In July 2017, the White House ruled out a Russian company from the list of software vendors whose products are approved for use by US government agencies. By the end of the year, all state bodies in the country had to completely abandon the use of Kaspersky Lab activites. At the same time, it was forbidden to use the company's products in Latvia, and the UK's National Cybersecurity Center recommended that some agencies not use the company's software.

"The share of government agencies in the company's total revenue is insignificant," says Zecurion CEO Alexei Raevsky. But any negative information leads to a reduction in business, he adds. "Therefore, most likely, we will see a further reduction in the share of Europe and North America in the total revenue of the company up to 20% -30%," he said. "At the same time, the company is successfully increasing its presence in other regions, compensating for their losses." To improve the situation, according to Raevsky, will also allow the opening of a new data center in Switzerland, which the company announced in March this year. Thus, Kaspersky Lab hopes to reassure the Western authorities, Reuters reported.

In the product plan, Kaspersky Lab technologies are not unique, says Ilya Sachkov, founder and CEO of Group-IB. At the same time, the company's specialists are good antivirus experts who deeply understand the threats posed by modern cybercrime, he added. "Leaving the US and Europe markets where the main competitors (for Kaspersky Lab) from among the large antivirus vendors, as well as companies of the new wave of the CrowdStrike type, can have critical consequences in the long term, the expert is sure. "In order to make a product in any high-tech area, you need to fight with the strongest competitors, and in their markets."

A representative of Kaspersky Lab did not answer the questions of Forbes, suggesting that he limit himself to information from the company's accounts.

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