Russia's Steve Jobs

By bne IntelliNews November 12, 2010

Mike Collier in Riga -

Russian companies may offer some of the best opportunities in the world for investors, but even the most ardent Russophile would have to admit they sometimes suffer from an image problem. Words like "giant," "monopoly," "state sponsored" and "secretive" get bandied about in the western media so carelessly that it's easy to fall into the trap of thinking that entrepreneurship and excellence have had nothing to do with Russia's economic renaissance. Providing an antidote to such poison are companies like Kaspersky Lab that provide a timely reminder Russia owes just as much to its brainpower as it does to its wealth of resources.

Like many great Russian success stories (Faberge, Kalashnikov, Tupolev), Kaspersky bears the name of a single individual: Eugene Kaspersky, who founded the company 13 years ago and is still its chief executive. Or rather, it bears the name of two individuals, as a good deal of the company's success is also due to co-founder and chairman Natalya Kaspersky.

Over 300m people worldwide are protected by Kaspersky Lab products, and the corporate client-base exceeds 200,000 companies. Product activations currently number over 10m per month and in 2009 the company claimed unaudited revenues of $391m (up 42% on year). In the words of Latvian-American IT journalist Juris Kaza, Kaspersky is effectively "Russia's Steve Jobs" and the company he founded could be described as "a Silicon Valley company that just happens to be located in Russia."


At the opening of its new office for the Baltic states in Riga recently, the audience of puzzled journalists and leading geeks were given quick evidence that IT excellence can originate just as well from Siberia as it can from California (Kaspersky's three research offices are in St Petersburg, Moscow and Novosibirsk).

All too often, Baltic press conferences consist of a dour drone in a poorly-lit boardroom, accompanied by an A4 press release and couple of curling sandwiches if you are lucky. In contrast, Kaspersky took over the best hotel in town, presented attendees with mock "virus protection" passports, press packs on flash disks and - gasp! - a free copy of their bestselling product, Kaspersky Anti-Virus. The company then rounded the event off with a three-course lunch, and all to mark the opening of an office that will likely have a staff of one for the foreseeable future.

But more impressive even than the poached salmon was the way Kaspersky's young team, led by Gary Kondakov, director of operations in Eastern Europe, Asia and Africa, fielded questions in three languages while displaying levels of product and market knowledge that had even the spottiest geeks nodding their approval. With his soft accent and diamond ear stud, Kondakov is about as far from the clichéd picture of the dour Russian board member as it is possible to imagine. "If we fulfill our plans, we will be number three globally at the beginning of next year - but we are speaking about a very specific part of the market, corporate security content management, not the whole information security market," he told the assembled journalists.

According to Kondakov, much of Kaspersky's success lies in its approachability and positive brand image. "Probably we are the only company in our field who can say that our partners are part of our community. Partners have very specific relationships in terms of being one family. We have huge and often humorous events for our partners, conferences in different parts of the world and lots of other initiatives."

"When we open an office in Johannesburg, our people also go to Botswana, Namibia and other countries in the area. Our competitors would probably consider these to be small markets, but believe me there is business there as well. We pay lots of attention to 'localability' as we call it within the company," he said.

In contrast, Kaspersky's "Russianess" is increasingly irrelevant. "Probably very few people know that it is a Russian company," Kondakov said. "85% of our business is outside Russia. Two years ago when we opened our office in Dubai, a journalist asked Eugene Kaspersky what made his company different. Eugene answered him this way: 'Do you know who is Mr Syamantic or Mr BitDefender? Nobody knows them. But Kaspersky is me and I am here in front of you'."

Perhaps surprisingly, the global economic crisis has proven that security is one of the last things to get cut when companies are looking to save money. "Even if you are down to your last $100, you will pay for security because in our web world it means everything. The price of information in your computer is much higher than what you pay to defend it," Kondakov said.

But as well as trumpeting Kaspersky's arrival, its management team came to Riga with a warning. A new IT security threat called "Stuxnet" has the potential to cause far greater damage than anything seen so far. According to some theories, it was developed by Israel to cripple Iran's nuclear programme, but has now gone rogue. "It's like when the street gangs of Los Angeles stopped using knives, clubs and home-made guns and suddenly would get a fully-equipped Uzi or military grade M-16. That changes the game," says the IT journalist Kaza.

Luckily the Russians are on hand to protect us. "Clearly we are among the good guys," smiled Kondakov.

Russia's Steve Jobs

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