During Juan Santana’s recent visit to Canada, he sat down with e-ChannelNews for an interview. Here is what he had to say.
ECN: What in your view sets Panda Security apart in the security market?
JS: There are two main things. The first one as you know the malware space has increased and the amount of malware we have out there has increased in the last two to three years and the reason is the motivation from the hackers has changed and it’s a business behind it. So it’s becoming more and more important to have automated detection agents in order to deal with the shear volume of malware we’re getting through the lab every day. The first one would be the fact that we have the systems to deal with the volume of malware that is being produced out there. That however is a technical aspect. Lately, we’re coming to realize that from a customer’s perspective, it doesn’t make that much of a difference what technology you have because they are not really focused on it. They just want to be protected. So from a marketing perspective, the biggest difference that we have is the approach we have in working with the channel worldwide. The type of programs we have in place and the type of relationships that we have been able to develop with the different channel partners in the different countries. We base our competitive edge on the fact that we have a better technology that suits very well our landscape that we have today and we are able to sell that in a go to market strategy which is well aligned with the channel partners we work with.
ECN: Where do you see internet security going in the future?
JS: Well, because it has become a business, security is going to become an even bigger concern for users more than it has in the past. Our database for malware has increased in the past two years from 3 to 5 million samples which we had at the beginning of 2007 to more than 30 million samples today. I do see a landscape where that database grows up to more than 200 million samples because of the economic motivation. So what we’re going to see is an increasingly sophisticated malware being produced which is going to be in avalanches trying to fool the users and trying to steal data and money from their accounts.
ECN: How does Panda engage the channel in Canada?
JS: From a channel perspective, we have a channel team working with us and they have divided the country into different regions and we have specific programs for the channel and we are targeting three different components. One of which is recruiting the channel, offering the best programs we have. The second, which is a very important aspect to us, is the training and certification of the channel and then once they sign up and start working with us, it’s all about managing the relationships and fielding the leads and helping them close the sales. That has been our approach and it’s what the channel partners value the most. This is a process that we have worldwide and that we have implemented in Canada as well.
ECN: Do you sell directly or do you use distribution?
JS: We sell essentially through distribution. There are some legacy customers that may have bought directly, but we are migrating into the channel as the channel relationships expand. We have a very clear channel focus in the company.
ECN: How can VARs interested in dealing with Panda profit from promoting Panda Security solutions compared with other solutions out there?
JS: I think the biggest thing is that ultimately we have competitive programs that from an economic standpoint, are very beneficial to the partners. They can compete with other solutions that are out there. But I think the biggest tool that they have to compete is that all products have been specifically designed to be sold through the channel. That means for example, there is a partner’s console that allows them to manage all of the products they sell to the end clients and that gives them the granularity to see where and how to manage the end point solution for the client and from a competitive standpoint and that is what we have seen that they value the most.
ECN: Are there recurring revenues that can occur with Channel Partners?
JS: Of course, because the security solution is a subscription model and it is not a one-off sell. So what happens is that any new customer that buys a Panda Security solution, that solution in the following year is renewed by the same channel partner, and in fact we have some protection mechanisms to ensure that he has the best terms if he brought the customer initially, that customer is never touched by Panda and always stay with the partner. The consistency in that approach is something that they have valued a lot.
ECN: How do you handle direct sales?
JS: The direct sales we have are very limited. It’s coming as a legacy from the past. So essentially, what we are doing is that those customers are taken care of and we are progressively migrating them to the channel network which is the goal. This is a worldwide goal and not only in Canada. I am convinced that the only way to have a reach into the market and to have breadth is to be able to work with very committed channel partners in different countries.
ECN: Currently, when end-customers renew, do they have to renew with the partners or is there a means for which a var or a channel partner will get credited if a customer renews through Panda?
JS: If a customer buys through the channel, they cannot renew through Panda directly. They will have to renew through a channel partner so when the expiration comes due, we wait, we tell the channel partner who sold the solution initially,”you have a customer who is up for renewal”, and then we work with him to have the customer renewed.
ECN: In terms of distribution partners, who would the channel contact?
JS: I think the main contact will be Joao Xavier at Panda Canadian office. New partners should make sure they get the attention from the senior staff to lead them into the right relationship with whoever it’s appropriate with from a regional perspective.
ECN: Would VARs contact distributors as well? or do they just contact distributors to buy product? and… Do they require authorization in order to buy Panda solutions?
JS: They can buy directly from the distributor or from Panda directly. We don’t force them to go through distributors if they don’t want. In some cases, we have found that channel partners do not want to go through distributors, so they can buy directly from us. And, if they go through distribution, they don’t require authorization. However, we encourage the channel partners to get to know us so we can train them properly.
ECN: Who do you see as your main competitors in the security market?
JS: We are competing essentially with the big established players in Canada which would be a Symantec or a McAfee. I think that those are the biggest competitors that we have. The one thing is obviously that they have very big installed bases, they are well known brands with the companies and enterprises and businesses in general. The one area where we see less competition is in the managed services side. We have a product called Managed Office protection which allows channel partners to manage the security of end clients and in that one, we are seeing much less competition. If we are talking security as a whole, it will be the main players like Symantec and McAfee predominantly in the Canadian Market.
ECN: In terms of their products, they seem to be end-point solutions as opposed to perimeter solutions and I see that your product line also has some perimeter solutions such as the kind that say Baraccuda would have.
JS: Yes, very much so. The good thing about security is that despite the financial crisis, we are still seeing growth in security. The growth we’re seeing both on the managed services side and on the perimeter side is bigger. Just to give you a sense, end-point is growing anywhere between 5 and 8 percent, perimeter solutions is growing between 15 to 20 percent range and managed services is growing in the 40 percent range. We make the compelling argument of having a solution for the three different segments that customers can buy from us directly.
ECN: Where is growth in the security market coming from?
JS: Most of the growth is coming from the managed services side of things. Also, I have to say that in our company this is a big focus because that is the way how we are working with the channel. The channel is putting alot of focus in that area lately. I think that one of the ways in which we have been able to differentiate ourselves is having a very strong managed services solution specifically designed for the channel.
ECN: Where does the bulk of your sales come from?
JS: As of today, the majority of the sales come from the traditional solutions, but the managed services represent already more than 10% of our revenue. And that was coming from less than 3 percent a year and a half ago, so you can get a sense.
ECN: Do you see Canada as a significant market for Panda?
JS: We see it as a market in itself. Despite we’ve been present here for 5 years, we have not penetrated it to a level we want. From a population perspective, from a size perspective, it’s a sizeable market for us and we want to continue to make progress and to continue to grow. I think the US market is a market that everybody targets. It’s extremely competitive and it’s a market that gets a lot of focus and attention from all of the vendors and they are forgetting about Canada which is a really sizeable market. The market in Canada is bigger than most of the European markets, so for us, it’s a huge avenue of opportunity and growth for the coming two years.
ECN: One thing that I noticed in terms of the product line, there doesn’t seem to be a solution for the Apple Mac platform. Is that something that you’re looking at or is it something that you’re not interested in?
JS: It will be coming. As you know, there is a very limited market for security in the Apple Market today, not because it’s a more secure system as people think, but the critical mass that they have make it less attractive to hackers.
ECN: What do you think of Canada?
JS: I have visited Canada a lot, especially on the personal side because I like it. Business wise it’s my second trip to Canada and bear in mind that I am on the job only for the last 12 months. Canada is an area of focus for me.
ECN: Any interesting memories from Canada?
JS: Business wise, what I’m seeing is that the ability for channel partners to manage security with very few on-site visits where the density of the population is not as high in certain regions as it is in Europe or in the US. Personal side, I have lots of memories.
ECN: What message would you like to leave with VARs and Resellers?
JS: The message that I am hoping to convey is that historically, Panda has been very well identified as a technology innovator in the industry, whose technology has been more known to the most savvy users. We have changed the focus of the company to make sure we convey that to the market not from a technical differentiation, but from a benefit differentiation and that is a major change in the focus that we have done and in order to have the reach that we need, we need to do that through the channel partners. That is why when I got the job June of last year, my main focus has been ensuring that we have a product offering that can be leveraged by the channel and making sure we were in line with the trends towards service providing as opposed to licensing. I think today, because of how I see the business growing, that is what the market is accepting best from Panda and I’m very glad to see it because that was a very big bet that we took a long time ago to move into this direction.
ECN: Is Panda publicly traded or is it privately held?
JS: Panda is a privately held company. We were founded in 1990. We’ve been around already for 20 years. It was founded in Spain. We have presence in 56 countries. It is still private. There was a big change in ownership about 24 months ago when the new shareholders and some venture capital investors bought 75% of the company. We intend to take the company public at some point when we grow from our current base, but now with our financial strength, we are able to be much more aggressive. Just to give you a sense, in the last 18 months, we have bought 8 different companies in different countries who are helping us to increase the distribution of our products. Today, we have all the ingredients that we need to succeed. A very strong technology, a well-defined strategy in terms of how to get to the market and the financial strength that the shareholders are providing to the company.