It was a pleasant experience for me to visit the Trend Micro’s Office in Taipei. With revenue was about US$ 1.05 billion in 2014, I expected the company should be fantastic concerning business model. I was planning to dig as many information as I can to understand their business.
From what I know from my previous research, Trend Micro is a global company which develops security software for servers, cloud computing environments, and small business. Its headquarter is in Tokyo and provide cloud security for customers of VMware, Amazon AWS, Microsoft Azure and Cloud Air. This company is listed as one of top ten security software vendors’ revenue and market share in 2014 by Gartner (May 2015). It is at fourth place after its major competitors like Symantec, Intel, and IBM.
When we came to Trend Micro’s office in Taipei, we realized that we actually learn more. We were welcomed by Mr. Bob, one of the Chief in the office. He is a good man and really humble. We were welcomed warmly. After an introduction presentation from us, he explained to us about Trend Micro’s history and business strategy.
The company which was founded by Eve Chen in Los Angeles, California in 1988, currently employed 5200 employees around the globe and 1400 employees in Taiwan. They have some products related to the security system such as PC and Mac protection, mobile device protection, premium support services, password management, online backup, and synchronization.
Trend Micro was born 27 years ago, it is almost similar to my age. During that period of time, there were some changes to their business model. It was a storage company at the beginning, but then now they are focusing more on the security system. Especially regarding the needs of businesses about IT security system and the increasing trend of Internet of Things (IoT).
Mr. Bob quoted a pearl of wisdom from the company founder, “if you want to be a big player, you should focus.” I totally agree with that. With the increasing competition rates among security business field, the company should concentrate on a particular area that they are unyielding. Trend Micro earned 70% of its total revenue from security. It means, their focus on the safety contributed well to their incomes.
Based on his explanation, until now there are about 68% of companies have antivirus. It means the rest are still not aware enough of the crucial things in building a secure IT system for the enterprise. On average, it spends 230 days for attacking companies in the US and only 15 days to attack businesses in Taiwan.
During the Questions and Answer session, Mr. Bob answered my question that the most challenging task for Trend Micro is educating companies about the importance of having a well IT system. Just recently Trend Micro has meeting managers from the car industry in Taiwan. Mr. Bob told us that having security system is pretty new in the automobile industry. It is because, a few decades ago, the operating system that was used in the car was different with the operating system that we are using in our daily activity. However, with the increasing trend of IoT, car adopted a similar operating system that we use on our personal computer. This leads to the potential security hole because hackers now can steal company’s data throughout the car. In the automotive industry, the car company that already has well security system is Tesla. They have more up to date firmware in their cars.
Following the problem in the consumer awareness, Trend Micro’s strategy is educating the market about having secure cloud system and proper budget in the security system.
Currently, Trend Micro has technology support center in Manila, Philippines. There was a curiosity among us, why they put their support center in Philippine instead of in India. Because from our understanding, India has the better capability on that. Many companies have their support centers in India. Mr. Bob explained that Philippine has lower employee cost compared to India. And nowadays Philippine becomes a global tech support center due to its strength as an English native speaker country.
Trend Micro located its Research and Development center in Taiwan. Because from the company point of view, Taiwan has high human resources in computer science field. From this hi-tech island, they can develop their product. There are seven points on Trend Micro’s Smart Protection Network; CDN/xSP, Research Intelligence, Wb Crawler, Trend Micro Endpoint Protection, Trend Micro Web Protection, Trend Micro Mail Protection, and Honey Pot.
There is one way to develop Trend Micro’ product, first time for me to heard that. In purpose to collect information about the new virus or new method from hackers, the company will create a computer security mechanism called Honey Pot. It is set to detect, deflect or counteract attempts at unauthorized us of the information system. It consists of data that appears to be the legal part of the site and contains information to attract hackers, but actually isolated and monitored. At this point, we learn how the company manages their cost well. This strategy can achieve the cost efficiency of the enterprise.
During the presentation, Mr. Bob mentioned that Trend Micro just acquired HP Tipping Point. It is an American software company focused on network security products, especially intrusion prevention systems for networks.
Under Trend Micro’s management, they are now combining new application level security practical with user awareness and inbound/outbound messaging inspection capabilities. They can protect the user’s network from sophisticated attacks.
From Trend Micro’s point of view, although companies already built a secure IT system, several points could become weak security points; consumerization, IT/visualization, and hacker or email malware. Those points are related to human psychological thinking. For example, outside the office hour employees tend to use consumer technology (consumer cloud provider) to do business. Because consumer technology is used by many people, there still a point for attackers to steal the companies’ data from it. For us as MBA students, it is necessary to understand this regarding our action that related to company’ data.
I learned that in the security industry, Trend Micro already implemented a good move. They became a security consultant and introduces the services step by step to the client. In developing a new product, Trend Micro finds the niche before creating the product, because for them the demands already. Their marketing department does not need to work harder to sell the product. Another approach is cooperating with cloud computing provider. From this strategy, they can provide a security feature for the whole system.
I noted that in the future, the antivirus will not be in a package like it used to be. Subscription system will be the new business model that any other IT security company should adapt to stay on the top in this industry. (Mufid)