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July 2, 2009

Panda Security planning a worldwide footprint

CEO says M&A and free AV will build global brand

By CBR Staff Writer

A series of acquisitions of subsidiary distribution partners and the seeding of the market with free anti-virus product is turning Bilbao-based Panda Security into a challenger brand in the market for enterprise and consumer PC security, according to company chief Juan Santana.

“Geographical expansion is the main investment thesis for the business,” the CEO told us in an exclusive interview, as the company closed a month when its global reach hit 56 locations after taking a 100% stake in its Nordic and UK franchises, and setting up new operations in Japan and China.

“Our expansion will continue and we expect to be able to confirm next week an acquisition of another company in China that will accelerate distribution of our security products to consumers there.”

In April, Panda had followed in the steps of highly successful competitor AVG, and announced it would start to offer free anti-virus services. Distributed alongside its licensed security software, the free service is intended to seed the market for upsell opportunities and slowly build a brand awareness that becomes global.

“I want to use the free model to get our products known outside the frontier of our existing business. It is a much better way and is more effective than spending lots on marketing. The free cloud anti-virus service will give people a good feel of what we can do and lowers the barrier to entry for PC security. In the six weeks since we launched the service we have seen millions of downloads and it has been extremely well accepted.”

Panda Cloud Antivirus comes to market after three years of development to produce a system that offers free scanning from the cloud. It operates with a very small footprint and uses low client resources yet is very fast, he claimed. Panda uses something it calls its Collective Intelligence system to collect statistical data about malware prevalence and pulls it back to the cloud, to identify new malware almost in real time.

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There is an appetite in the market, Santana insists. “The anti-virus sector is still growing, despite the downturn, and Panda is growing faster than the market,” he claimed. “We believe the consumer sector is currently running at between 7% and 9% a year growth, and the enterprise sector is increasing between 10% and 12%. The rate of growth has slowed from earlier levels that were in the high teens, but there is an acceptance that malware is still on the increase and that if you are not protected you will get infected.”

Panda’s own growth policy is in line with a strategic plan established in 2007, Santana explained. “When I joined the company in 2006 the perception was that Panda had excellent technology which was highly under exploited internationally.” After taking on venture investment, in the last two years existing franchises in Belgium, Holland, Germany, Austria, Japan and China have been bought and integrated as subsidiaries. 

These recent acquisitions, in addition to existing subsidiaries in the US, Spain and France, bring the current total up to 12. 

A flotation is on the cards, but not until 2012 at the earliest, the CEO suggested. “We will obviously seek to go public, but our investors have taken a long-term view, and the good thing about that is that the economic downturn hasn’t had any impact. It has also meant that there is time for the management team to focus on execution.”

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