InfoWatch Foreign business

2024: InfoWatch closes UAE office and refocuses exports to near abroad

InfoWatch closed its office in Dubai and reoriented itself to neighboring markets in its export strategy, follows from a speech by the company's commercial director Ilya Timofeev on May 22, 2024 at a conference in Nizhny Novgorod. This is due, among other things, to geopolitics.

Previously, InfoWatch was more focused on the Arab market, and at one time even an office was opened. But some time ago, due to the current geopolitical situation and the peculiarities of the product itself, it was decided to close it. And we have largely reoriented ourselves to work with the market of neighboring countries, - said Ilya Timofeev.

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TAdviser

The company has not previously announced the closure of the office, which has been in effect since 2017. Ilya Timofeev clarified TAdviser, the office in the UAE was closed until 2022, after which the company continued to consider the possibility of direct presence in the countries of the Arab region. However, against the background of a change in the geopolitical situation, which affects, first of all, the difficulties with financial transactions, InfoWatch decided to continue to develop business in this region in a different format - through partners from whom requests for cooperation continue to come.

In turn, the "features of the product," which Ilya Timofeev also mentioned, are that its use with maximum efficiency requires good engineering competencies for tuning, which must be developed in the region of presence. Without a local engineering resource, the cost of implementing projects in the region can increase significantly, since trips of specialists are required to participate in projects.

In addition, the demand for our solutions in Central Asia has grown, and in order to satisfy it, we are directing more efforts to business development in this region. Here today we see a more favorable situation in terms of the impact of sanctions against Russia, as well as the presence of highly qualified Russian-speaking specialists in the region, which reduces our investment in their training and the costs of implementing projects. Therefore, in particular, we continue to develop a representative office in Kazakhstan, where interest in InfoWatch Group products both in the public sector and in the commercial segment may be even much higher than in the countries of the Arab region, - said Ilya Timofeev in a conversation with TAdviser.

source = From the presentation of Ilya Timofeev

During his speech on May 22, Ilya Timofeev cited statistics that in total in 2022-2023. InfoWatch implemented 144 international projects, the largest share of which fell on Belarus, followed by Kazakhstan. In Belarus, it is easiest to operate, and in the Kazakhstan market there is a dual situation: on the one hand, there is a desire to continue working in the Russian Federation, and on the other, an attempt to evade sanctions and secondary sanctions. At the same time, the company has not yet experienced problems with payments in Kazakhstan, and this is one of the main factors accompanying the export of technologies.

At the same time, the technologies supplied by InfoWatch are now subject to certification in Kazakhstan, and pressure from certification bodies is increasing. If in 2022 the company did not meet such obstacles, then in 2023 they are more and more manifested, the commercial director of InfoWatch noted at the conference.

In addition to Belarus and Kazakhstan, Ilya Timofeev separately noted. Uzbekistan Although there are a small number of projects, there is enough interest and openness of the local market so that you can work with minimal technological changes.

For the rest of the countries listed on the slide, there are difficult moments: first of all, the company is experiencing problems with payments and caution on the part of partners - close consideration, "almost under the microscope," of those companies that work with InfoWatch, and InfoWatch itself.

A number of other Russian information security developers have been working tightly in the Middle East for several years and continue to do so now. Among them are Kaspersky Lab, Positive Technologies and others. In 2023, SearchInform, which entered this market with information security outsourcing services, also opened an office in Dubai.

Mikhail Penkovsky, who has been vice president in the EMEA region at Veeam Software (now working at UserGate) for 14 years, is skeptical about the prospects of Russian rival colleagues in the Middle East. He lived in Dubai for almost a year when he was at Veeam Software and knows Middle Eastern distributors well. Mikhail Penkovsky voiced his point of view at the UserGate press conference at the end of April. In his opinion, in particular, fellow competitors are "a little mistaken" about their chances of successfully conquering the Middle East market today:

I know that they have targeted implementations in Saudi Arabia, in the UAE, but talk about a serious full-scale business... Key Dubai distributors in the bay are, among other things, distributors of large American vendors. Some of our colleagues are on the sanctions list. Entering this market without partners, without integrators is extremely expensive and problematic. And if colleagues want to seriously go through the distribution channel, then "hand wringing" will happen: a conditional Microsoft, VMware or someone else will come to the distributor and say that he will not work with the distributor, because he cooperates with unwanted vendors from an undesirable country-manufacturer.

How to solve this problem is not clear. Nothing prevented the UAE from blocking the license of the sanctioned MTS Bank when it opened in Abu Dhabi, Mikhail Penkovsky recalled. Also, transfers between Russia and the UAE are now being blocked, "this is happening." At the same time, despite the current circumstances, it is necessary to communicate and prepare the ground for work in this market tomorrow, he said.

2017

Kuala Lumpur Office

In September 2017, InfoWatch Group of Companies (GC) announced the start of the local representative office of the full cycle InfoWatch SDN BHD in Kuala Lumpur, which will operate in the markets of Malaysia, Indonesia and Vietnam in order to build a comprehensive presence in Southeast Asia.

Dubai subsidiary

On August 15, InfoWatch Group announced the completion of registration and the start of its InfoWatch Gulf representative office in Dubai, United Arab Emirates (UAE). The subsidiary is registered in the DMCC (Dubai Multi Commodities Centre) free economic zone. InfoWatch Gulf was headed by Christina Tanzyura, head of business development at InfoWatch Group in the Middle East. You can read more about the event here.

On May 23, 2017, it became known about the opening of the InfoWatch office in Dubai. The company became the first Russian manufacturer of information leak protection systems to do so, Izvestia notes.

The Dubai office will be used to operate throughout the Middle East. InfoWatch will look for customers in the region, and the integrator will sell products and support.

Natalia Kasperskaya

It does not work remotely, no matter how they try. Personal relationships are appreciated in this region. You come here - business goes. You leave - business does not go, - said Natalya Kasperskaya, president and co-owner of InfoWatch.

To attract customers, InfoWatch intends to open the code of its products to allay customer fears that the company may send collected data somewhere. Previously, the company did not practice this approach.

Kasperskaya says InfoWatch has only sold a handful of product kits in the Middle East. To enter the market, Kasperskaya sold a 3.75% stake in its holding to the Russian Direct Investment Fund (RDIF). According to the publication, the package was estimated at about 187.5 million rubles. Half of these funds ($2 million) are planned to be spent on business development in the Middle East market.

Vyacheslav Raevski, head of Dubai-based integrator Al Hosani Computer LLC, said that without opening an office in the Middle East, it is difficult to talk about sales of serious security products in this region.

Kaspersky Lab followed the same path, opening its office here in 2008. Now they are in 4th place in the Middle East antivirus market, "Raevski explains. - Large companies and government organizations should see that the vendor is next to them, that this is a serious and large company that is ready to spend money on technical support. And the fact that they participate in key conferences on cybersecurity is also perceived here very positively.[1]

Working with Russian Trade Missions Abroad

The InfoWatch group of companies began working with Trade Offices abroad to promote and bring domestic products to the markets of Malaysia, Thailand, Vietnam and Indonesia. Such work will be carried out in accordance with the terms of reference approved by the Ministry of Economic Development of the Russian Federation. ^[2]

"Such a mechanism of direct departmental support for the export of Russian high-tech products of a commercial company using the capabilities of Russian trade missions abroad, as far as I know, is being used in practice for the first time," said Vladimir Shutemov, director of international business development at InfoWatch Group. - I would like to thank the relevant agency - the Ministry of Economic Development of Russia, because thanks to the timely, responsible and constructive reaction of which to the situation in the industry and the demands of the market, such a mechanism has finally appeared. I am sure that if the effectiveness of these measures is confirmed within the framework of the pilot project, this can be a very good signal for the entire domestic information technology industry, because InfoWatch's experience in implementing joint projects with trade missions can be easily replicated in the future. "

The approved terms of reference provide an opportunity for the Trade Missions of Russia in Malaysia, Thailand, Vietnam and Indonesia to provide support during initial negotiations with foreign consumers, assistance in forming a list of interested consumers, as well as assistance in holding meetings of company representatives with interested foreign organizations.

2014

Conquering Asian countries

In 2014, InfoWatch Group of Companies had its first sales in new foreign markets - in Turkey, Malaysia and Indonesia, Rustem Khayretdinov, deputy general director of the company, told TAdviser in September 2015 . Among the customers are financial, telecommunications and government organizations.

In India and Bahrain, as of autumn 2015, InfoWatch has more than 20 customers - financial and government organizations.

InfoWatch's Malaysian clients include Bank Persatuan, Indonesia includes pumping equipment maker KSB Group, Bahrain includes First Energy Bank, Venture Capital Bank, Kuwait Finance House, Prime Minister Court, and India includes logistics companies Gateway Rail and Interocean, media companies Prime Focus and NDTV.

According to Khairetdinov, the volume of sales in these markets is not yet large. However, InfoWatch regards the existing result as positive, including due to the fact that it considers these markets difficult for sales of foreign enterprise products.

"In the first year of work here they are looking at you, in the second year it may come to some kind of pilot projects, and only in the third year they can transform into real sales."

Rustem Khayretdinov names Latin America and Vietnam as new interesting markets for InfoWatch

The presence of a local office and personal contacts in the country where the company does business is a key factor in success in Asian markets, which distinguishes it from the European market, said InfoWatch Deputy Director General in a conversation with TAdviser. For this reason, in Malaysia, the company has its own office, which also deals with sales in Indonesia.

In Bahrain, InfoWatch has a Fakhro Electronics partner with a large staff of qualified technicians and high-quality technical support, says Khayretdinov. In addition, in this country, InfoWatch has an employee "embedded" in another local partner company. The partner is engaged in the sale of various products, and it is important that this company has a person who promotes the interests of InfoWatch, explains Khayretdinov.

"Arab customers are very similar to customers in Russia in that they look at each other - whether the solution they are thinking of purchasing is already used somewhere. If, for example, one bank bought this solution, then you can be sure that it will be sold to some other banks. The first sale to the vertical segment in such markets is the most difficult, "says TAdviser Deputy Director General InfoWatch about the peculiarities of the business environment in Bahrain

In Germany, the company sells products being developed by Germany's EgoSecure, which InfoWatch acquired in 2011. According to Rustem Khayretdinov, EgoSecure sales are growing at about 30% per year. He attributes the high growth rate to two main factors: a low starting base, as well as increased marketing of EgoSecure.

"EgoSecure has high-end engineers who make a great product, but marketing and sales are not their horse, as is often the case with developers. After we invested in the development of marketing and sales, the company has a development director and active sales, which did not slow down to affect the business result, "says TAdviser Deputy Director General InfoWatch

Speaking about plans for further geographical expansion, Rustem Khayretdinov named the countries of Latin America TAdviser as the most attractive markets. In his opinion, against the background of the anti-American policy that takes place in this region, a company with Russian roots already has an advantage here due to the fact of its origin.

Another of the most interesting markets for the company is Vietnam: "We have common problems with them - monitoring, Internet terrorism, separatism, and they do not trust the Americans very much, so in this market we see great interest in our products," - said the deputy general director of InfoWatch.

On the other hand, unlike the United States, Vietnam does not have such strict security policies that organizations must comply with, so it often takes a very long time to decide on the purchase of information security products here.

FinallySecure Acquisition

In February 2014, InfoWatch announced the acquisition of FinallySecure, a full-disk encryption technology, from the German information security solution developer Secude AG^[3]The direct buyer of this Secude division was the German company EgoSecure, part of InfoWatch Group, which actively uses disk encryption technology in its EgoSecure EndPoint product.

2012

Acquisition of Appercut Security

In October 2012, InfoWatch announced the acquisition of Canadian company Appercut Security. The transaction went through the exchange of shares between the shareholders of the companies.

Acquisition of a stake in G Data

In October 2012, Infowatch CEO Natalya Kasperskaya acquired shares and joined the board of directors of the German antivirus company G Data Software^[4]

Plans to open an office in the Gulf

Natalya Kasperskaya, CEO and main owner of Infowatch, told CNews that in 2013 a company office could be opened in one of the Gulf countries (November 2012). "It's likely to be in the United Arab Emirates (UAE) - Dubai or Abu Dhabi," she says. - The rental price is high both there and there. Another option is Saudi Arabia, whose market is larger than in the UAE^[5].

In 2011, Infowatch's revenue amounted to 184.4 million rubles. In 2012, excluding the acquired German Cynapspro (Ego Security trademark), Kaspersky expects to increase it by 15%. Thus, revenue will amount to about 212 million rubles, of which 8-10% or about 20 million rubles. will fall on the Gulf countries.

"So far, we have a" virtual "representative office in the Middle East: one person permanently located in the region and several partner companies," says Kasperskaya. - The most active sales are in Bahrain, and the implementation there, unlike the Russian ones, already means something for neighboring countries. We also have projects in Qatar, Oman, Kuwait and Saudi Arabia. "

As for other countries, concentrating on the Persian Gulf, Kaspersky decided to abandon efforts to enter the markets of India and Vietnam, where there is no such interest in Infowatch products.

"Bahrain is like a foot that managed to hold the door to the Middle East, now you need to make an effort and open it," says Kaspersky CNews. "I want to bring the region to a plus, which has not yet happened, and add a resource to work with it, including opening an office, renting space and hiring local employees for implementation and support."

Of the German developers, in addition to Ego Security, the company invested in the antivirus developer G Data (the Russians own 17% of the shares), but for the DLP system Traffic Monitor itself, the German market was not interested. Here Infowatch faced opposition from trade unions, which considered that the development of Russians was monitored by employees of customer enterprises.

2011

Expansion plans in Europe and the CIS

According to InfoWatch estimates, in 2011 the most developed market DLP in English-speaking countries, the market is rapidly developing Russia in and in some CIS countries, in Arab countries, in some countries. Asia The market in continental Europe is completely underdeveloped. Based on this, the company sees the nearest "regional expansion" as follows: active development in (primarily To Europe thanks to Kribrum solutions), promotion of InfoWatch and Kribrum solutions in the Middle East, strengthening of positions in Russia and the CIS countries. Among the countries of the post-Soviet space, InfoWatch emphasizes Belarus Kazakhstan , studies the possibilities of entering or actively promoting the markets of Ukraine,,, and. Azerbaijan Tajikistan Armenia Georgia

Acquisition of German EgoSecure

In 2011, InfoWatch included the German company cynapspro GmbH, which develops control systems for workstations and mobile devices in the SMB InfoWatch segment^[6]Commenting on the deal, Natalya Kasperskaya noted the company's plans to increase its activity in Europe. In March 2012, InfoWatch announced the rebranding of cynapspro GmbH: the company began operating in the market under the EgoSecure brand.

Natalia Kaspersky's company began moving to foreign markets in the same year when it separated from Kaspersky Lab

2010: Movement to Asia and the Middle East

Summing up the results of InfoWatch's work for 2010, the company's CEO Natalya Kasperskaya noted^[7]InfoWatch is beginning an active expansion into the countries of Europe, Asia and the Middle East, as it considers these areas to be the most priority.

"In 2011, we expect to significantly expand our partner network and implement projects launched in 2010. And we completed the year positively - we successfully carried out several pilot implementations in Turkey and the Middle East, concluded the first deals, "" she

2007: Expansion begins

In 2007, the Kaspersky Lab division, which developed a solution for protecting against information leaks, was called InfoWatch and, under the leadership of Natalia Kaspersky, was separated from the parent company. In the same year, InfoWatch began to develop its business outside Russia, opening a representative office in Germany on the basis of the German office of Kaspersky Lab^[8] then noted that the markets of German-speaking countries represented the direction of exceptional priority for her company. At the same time, the attempt to sell in Europe at that time was unsuccessful: the software did not work well with the German language^[9]This flaw was^[10] corrected.

Notes