Security: The Last Hope for IT Growth?
by Hong Suk-un, Editorfirstname.lastname@example.org
A. The domestic security market is facing tough times because of its poor market position among other software markets. It is because enterprises approach the introduction of security solutions in a selective fashion, not as if it is an indispensable tool to surviving in business, even though it requires prior consideration from the viewpoint of corporate risk management.
It is deplorable to see that the overwhelming focus has been placed on the investment in information security, not in security solutions, even though the nation's IT budget volume ranks among the top 10 in the world.
A new way of thinking is needed to prevent such large-scale accidents as the "CIH virus attack" in 1999 and the "1.25 Internet great disturbance" in 2003. Only after a policy approach has been made, will the domestic security industry attain a stable growth. I would like to stress once again that fostering the knowledge information industry is an essential undertaking if Korea is to attain a GDP per capital level of $20,000.
Q. What is your view of the recent spate of M&A among security companies that has resulted from worsening profitability?
,A. Not only M&A among security companies but also the "fusion phenomenon" between the security and the other IT sectors is likely to continue for the time being. There is no problem with what you might call organic combination if it stems from strategic need. However, we should be cautious about the possibility of M&A in the industry devolving into a simple money game.
I would like to stress that under these circumstances M&A would result in a loss confidence in the industry and could bring about its collapse. I would like to point out once again that the government should exert best efforts to create transparent and fair market conditions ahead of such moves.
Q. What is your appraisal of the domestic market as a specialized software development company?
A. First, I'd like to point out the poor management and infrastructure within the domestic software industry. Only after the overall infrastructure of the industry reaches a certain level will the truly successful enterprises and business heroes emerge.
I recently wrote in an article "Bill Gates could not succeed if he is in Korea." There are three preconditions for the software industry infrastructure to grow smoothly. First, recognition of the basic value of software is necessary. Namely, the software that is the result of the creative process should be purchased at an appropriate price and protected. Measures of this sort will become key factors in fostering intangible intellectual property rights, something indispensable to strengthen our global competitiveness in the future.
Secondly, transparent and fair market competition should be guaranteed. To this effect, the government and enterprises should cooperate with each other.
Finally, I'd like to request that the government provide institutional support. Although the government should decide to intervene in the industry, it should actively consider promoting conditions of fair market competition.
In my personal judgment, progress toward these three preconditions has already reached its limits. To advance further, we need to exert various efforts.
Q. The main thrust of the industry has changed from combating viruses to network security. What is the most appropriate marketing strategy in the current set of circumstances?
A. The shift is partly due to strategic considerations, but it is a natural result of the paradigm shift toward security. Recently, the infiltration routes of viruses have been becoming more complicated and their spread through the network continues apace. Accordingly, the switch in focus to meet the demands of users who need not just simple PC security but network-based solutions has been made.
In the title of the report we prepared internally, "The Major Two Growth Elements," the "two elements" of the title are a "local antivirus strategy" and a "global integrated security solution." This reflects our strategy of actively promoting our global image, while keeping local confidence in our company and in our business.
Q. Your company's advance in the Southeast Asian market is quite active. Would you comment on what results you have achieved there and your priorities for the future?
A. We operate local branches in Japan and China. In fact, they produced some tangible results, and although they are not satisfactory at present, we judge that the company is poised to enter a rapid growth period following its penetration of these markets.
We are approaching Japan as it represents the world's second biggest market, while placing emphasis on China for the possibility of future growth. However, I think it is premature to advance into the U.S. market at the present stage. Considering its IT industry, the American market has already developed to a mature and advanced stage. As we judge that if an initial advance into the U.S. market were to failed it would damage our image, we are now weighing the timing of such a move.
The basic strategy of AhnLab Inc. to advance into overseas markets can be summarized as a matter of 'selection and concentration', as well as incursions on a step-by-step basis.
Q. Your company announced it would move into the 'spyware business.' Why are you taking this step now and what does it mean for your company?
A. The basic idea is to fulfill our social responsibility as a company. We have completed the development of the "AhnLab SpyZero," online services exclusively for programs that are vulnerable to intrusion such as spyware, and launched commercial services simultaneously for such influential sites as Auction, Neople, Candybar, and our own security portal site.
SpyZero has passed through our strict quality control and screening process. It is designed to diagnose and cure programs that have been found detrimental to the host PC.
In tandem, through our global networks in Japan and China as well as Korea we hope to get as much information as possible that will and enhance our ability to effectively cope with and analyze harmful material. We plan to export these strategic products to Japan and China and later, the wider world.
SpyZero offers such services as the diagnosis of programs vulnerable to attack and a system cleaning free of charge. Customers pay only for the cures of problems that have been diagnosed. The charge for the service is only 1,500 won for one week. Customers can select any of four types of payment every one month, every three months, and every six months, and every one year.