Some Thoughts on Trend Micro Insight

It has been my privilege to attend all of Trend Micro’s analyst meetings, the first in 2007 and the most recent of which was at the end of October in Boston. While there was no “earth-shattering” news presented at the event (hence, my somewhat delayed blog post about it) here are some random thoughts from the meeting:

  • Trend’s management – and management style – tends to be a bit edgier than most, a style that I enjoy as an analyst because there is no veneer to dig through in order to find out what decision makers really think. This may come from the fact that Trend, while based in Japan, does not have a particularly national focus like some of their competitors: the US headquarters is in the Dallas area, analyst relations is in Ottawa, the CTO is based in Munich, and the company’s senior executives are scattered elsewhere around the world. This may also explain why Trend was more willing than some of their competition to readily respond to last year’s inquiry by the Electronic Frontier Foundation, presented to a large number of security vendors, about their willingness to detect state-sponsored malware.
  • The company was exceptionally – and surprisingly – open about sharing highly detailed sales figures, customer counts and other sensitive information. While analysts sometimes get this information in private sessions after signing an NDA, the level of detail that Trend’s executives presented was quite unusual – it even surprised some of Trend’s own staff members. Sometimes, vendors will share this level of detail if the company is in trouble and they are trying to reassure analysts, investors and others about the long-term viability of the company, but this was obviously not the case here. While I can’t share the numbers that Trend offered, the company is doing very well with regard to both revenue and customer acquisition.
  • A substantial proportion of Trend’s business comes from the consumer segment. While in the past the company’s consumer focus was on the protection of devices and the data they managed, the focus is shifting to individuals and families. For example, Trend will be using their Deep Packet Inspection (DPI) engine to monitor every device in the home, including more traditional platforms like PCs and smartphones to garage door openers, refrigerators and routers. This should position the company quite nicely in the rapidly growing market for security of the Internet of Things.
  • Trend does almost all of their business through the channel and was very detailed in their explanation about how they divide the channel by type and segment. The company is planning major advancements in the US channel that I cannot share here, but suffice it to say that the company’s channel presence will be significant.

This is not to say that the company is doing everything right. For example, Trend is not as well known in the consumer space – a market from which it draws a large share of its revenue – as some of its competitors. Some of the company’s offerings have received poor reviews in the past (although NSS Labs recently found that Trend was the highest scorer in its analysis of breach detection offerings). However, Trend Micro is hitting on just about all cylinders, doing quite well financially (substantially better than some of its competitors), and will be announcing some interesting offerings in the coming months.

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