It’s not often that the head of a company that makes its bread and butter by selling IT security solutions comes out saying that companies are spending too much on security. But that’s Art Coviello, CEO, RSA, for you.
“Too much has been spent reactively, without assessing risk properly,” says Coviello, adding: “Look at the anti-virus solutions in the market today; they are based on static signature technology that does not react to real time mutations of viruses.” Basically, what he means is that companies have been spending a lot more on IT security in response to fear of attack rather than as contribution to business goals.
He also does not subscribe to the popular view that spending on IT security will remain largely unaffected by the global slowdown. “I don’t think there is a single business that won’t be affected by this slowdown. In my career, I have seen several recessions that have been centred around sectors—the dotcom bust, the oil crisis, the banking crisis, etc. This is a recession with all these crises rolled into one,” says Coviello.
He believes India presents a great growth opportunity for the company, which has more than doubled its revenues to over $600 million (Rs 3,000 crore) from $300 million (Rs 1,380 crore) since its takeover in 2006 by EMC Corporation. “Even though our revenues from India are small right now (about 1 per cent of the total), we expect it to contribute 4-5 per cent of our revenues over the next three years, and considering that we are growing at 50 per cent compounded rate, it’s significant,” says Coviello, who also views the tremendous growth in mobile phone users in the country as an opportunity.
“I believe 12 phones are sold every second in India. With such volumes, a tremendous opportunity exists on that front,” he adds. IT market intelligence firm IDC estimates that worldwide mobile security revenues touched $789 million (Rs 3,156 crore) in 2007, and is expected to grow to $2.4 billion (Rs 12,000 crore) by 2012.
RSA also sees India as a significant technical talent hub, and is planning to hire about 250 engineers by the year-end. Presently, the company derives a bulk of its revenues from the financial services vertical followed by the telecom and IT services. Coviello, who has been meeting his Indian customers, believes that they are “cautious” in outlook; but to a lesser extent than clients in the US and Europe.
The India advantage
Why RSA is hot about the India market.
• Spending on IT security in India is unlikely to be affected as much as the other markets in the current global slowdown
• Indian companies are at the forefront of establishing security best practices benchmarks
• The exponential growth in mobile phone users is expected to boost demand for security solutions
• A large pool of technical talent makes localisation of R&D easier
In its recently published Global State of Information Security Survey, PricewaterhouseCoopers (PwC) revealed that of the 7,000-odd IT security professionals who were surveyed, 44 per cent indicated they would increase IT security spending, while 31 per cent saw security spending remaining the same. Only 5 per cent anticipated a dip in spending. The report also mentioned that Asian companies led by Indian companies were establishing security best practices benchmarks.