Kailash Katkar Curated

Founder & CEO of Quick Heal Technologies

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This profile has been added by users(CURATED) : Users who follow Kailash Katkar have come together to curate all possible video, text and audio interview to showcase Kailash Katkar's journey, experiences, achievements, advice, opinion in one place to inspire upcoming entrepreneurs. All content is sourced via different platforms and have been given due credit.

  • What is your expectation on revenue and margin performance for the full year?

    We are investing a lot of amount in existing product, additional new features and because of that you could see our expenditure is a bit higher for this year. It might be the same for next year, but in future, the development cost will remain stable and the products which are in the market will start generating more revenues. So, you can expect double-digit growth next year.

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  • Can you tell us an absolute number, that you believe, you can reach for this particular product portfolio in the next two years?

    Mobile will be one of the biggest contributors to our revenue in future because it has just started in the market. Still, the mobile users are not very much aware of the mobile virus threats. The threats are growing for mobile by more than 20 times, in the last three years. So, definitely, that will be the fastest growing product in coming future.

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  • Data consumption on cell phones and tablets are increasing every-day . Mobile segment accounted for 2% or less than 2% of your revenue. Do you expect this to grow rapidly for you as a company?

    Yes, Android would be the fastest platform. Last year we started this launched a product for this segment in the market and we have done Rs 5 crore business in mobile security and this is the fastest growing product in our portfolio.

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  • Which is the fastest growing platform for you? Now platforms are changing, Mac and Android have kicked in. In terms of platform sale, which is the strongest growing platform for you?

    Strongest growing platform is still windows because windows has a big penetration in the market. The Mac and other Linux are also picking up in the market, but windows is still the fastest growing platform in the market.

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  • How much of your current profit is coming from fresh license sale and how much is coming from AMC and renewals?

    Renewal is somewhere around 20%, rest is from fresh sale.

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  • What are the growth in your retail, enterprise and government divisions?

    We had good growth in the last quarter because most of our businesses are seasonal business. Usually, quarter two and quarter four has maximum sales compared to quarter one and quarter three. We have not calculated the vertical wise sale this year, but from next year, we will be able to calculate it.

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  • Give me a sense of your IP revenues because for a product company first you have invest then you have to monetise how far are you really away from monetising some of your key investments?

    This is really good question because I really wanted to pass on this message because when it comes to the product company when we plan for a new product or any new architecture or design plan for this thing we need to do lot of research on that so research is a one part where you keep on investing lot of money where you do not know whether you will be succeed into that or you might fail into that so that takes a bit around three to four months time and then after that product development starts. For product development there is a big investment because there is a big team for product development, it takes around one and a half year to two years time to complete the product and after completing the product when you take it to the market then again market also takes a long time to test the product and accept the product as a security product. Market demands like even if you give something to the market or to the customers, customers starts accepting or putting suggestions into that product and expecting some more features into that and customers really accepting means I mean to say mass customers really accepting that product is bit more time, it takes around six to one years’ time to really get that product stable and after that then there is a proven tested product by the customers and then there is only sale and you just need to maintain the additional features and the update for that product.

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  • Please correct me if I am wrong here but may be due to investments that you had to make or otherwise I think your return ratios have steadily come off in the last three or four years now is there an outlook that you have about when will there be an uptick and when will you start moving back to the historical levels that you were at?

    See the reason which you saw downside in our revenues because we have started investing into lot of new R&D especially enterprise because enterprise customers demands are much higher than the consumer products because consumer products just the anti-virus software and like a total security part of it but when it comes to enterprise customers there are lot of new technology which is coming up and with this new technology every enterprise is looking for security solution for that enterprise solutions and for that we really need to invest lot in R&D for developing these kind of security features for enterprise customers. As I have told you before also that we started putting lot of efforts into enterprise security just last five to six years back and we are almost at par with the foreign or energy products but it is not something that this is sufficient. Every security company globally all security companies are putting lot of efforts and putting lot of investment into the enterprise security because technology is growing very fast into enterprise.

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  • When you sell products on mobile what is your relationship with companies for example I am sure if you are making a software for OS has Apple allowed you to make a software, similarly if you are making a software for a windows platform have you negotiated deals with Microsoft?

    Mobile Security Act at this given time is available for Android and iOS. For iOS we have a optimiser because Apple does not allow security products for iOS but major market is with Android platform because if you see more than 80% market smartphone market is using Android mobiles.

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  • How large can this be I am just trying to figure out what are your internal targets for mobile specifically because I am just trying to think out loud none of the three of us sitting in the studios are using a mobile anti-security device as well so what is the target that you have for India over the next couple of years?

    There is a big market for mobile security, I believe that hardly 5% to 6% market is really using security products so people are not yet aware of buying a mobile security and there is a big opportunity for mobile security in market. We are putting a lot of efforts to educate the customer about the mobile security, use of mobile security and the importance about the mobile security. I believe that the way the smart phone market is growing same way the security market will grow, mobile security market will grow in coming future. We are just waiting for people to understand get educated about the mobile security and start buying the products.

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  • How much of your current product sales is coming via desktop and how much is coming via mobile?

    We launch mobile product just last year so last year 2014-2015 was crucial year for which is for mobile security because we just target selling this product into the market and this year again we will do much better. Last year we have done around 8 crore, this year we planned to reach out somewhere around 18 to 19 crore but it totally depends upon the market acceptance and all this.

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  • Now 85 of your businesses we understand comes from retail accounts where you have a dominant share of 30% at what rate is the retail anti-virus market now growing versus the category for you and with a strong distribution network what market share are you eventually aiming at?

    At present I believe we are somewhere around 30 to 33% market share in India. If you are talking about the anti-virus retail market growing percentage I really do not know that part of it because usually the surveys are done by the media people and they come out with these kind of figures which recently we have not come across any such figures.

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  • But even if you contest it, if suppose you have to go ahead and make that service tax payment instead of the Value Added Tax (VAT) payment that you used to make earlier then what could the impact be on your net profits margin because the service tax that you will have to pay will be 14 percent?

    Yes, today it is at 14 percent. At that given time it was not at 14 percent, it was less but I am 100 percent sure that I will be able to click this. Because the case is very strong. I have taken an opinion advice from a big lawyer from across India, not from one lawyer but I have taken it from multiple expert people.

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  • The bigger issue that the market is a bit worried about is the fact that SEBI has sent a notice to investors about a service tax of Rs 56 crore that you have to pay and additional penalty of another Rs 56 crore along with interest. Is this correct, is this amount something that the company has to pay out?

    I will say this that the company has received the order from service tax department but if I have to answer your question directly put it in a brief way that when this product came under excise in year 2006 from that day we are paying excise on Quick Heal range of products. When we thought of when this product as an excise product we took this manufacturing part of it to excise free zone that is Rudrapur and Himachal Pradesh and the day when we shifted our manufacturing process to the excise free zone now the department wants service tax on that product. But from my point of view this is fundamentally not right. I believe in Indian legal justice and I wanted to take this to next level and I am 100 percent sure the case is very strong.

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  • Before we talk about the complain issue the first thing I want to know from you is why do you go for Initial Public Offering (IPO) in the first place. Because out of Rs 450 crore the fresh issue was Rs 250 crore. But you already had cash in hand of about Rs 100 crore and even the forthcoming cash flow was likely to be good. So, what was the need for the IPO in the first place?

    I understand your question. Going for IPO and having a primary in company was for new product development and taking that product to the market. So, Quick Heal Technologies is definitely known by anti-virus company in a big way but we have already started developing lot of enterprise security products and we wanted to take these products to all customers. We have also created a separate brand for this enterprise security products by name Seqrite and we wanted to take this product to the market and we wanted to increase the R&D for developing more enterprise products and other Mobile Device Management (MDM) products.

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  • Please share some of the innovations that you are bringing to the market?

    We have recently launched Fonetastic which is a fun app targeted at the youth. It is a combination of multiple apps. People use apps to clean up disk space or another app to control their network usage so Fonetastic does all that and provides powerful security as well. We are also in the process of providing Safe Banking feature to the mobile apps so that people are able to carry out financial transactions without worrying about loss of sensitive data.

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  • What are the challenges that you are facing today? How do you plan to tackle these challenges?

    The nature of some software products and the framework in which product creation is carried out often influence the complexity and challenges. Keeping up with the enhancements in technology in products and solutions, the associated high costs of maintaining and servicing a product over its lifetime impact creation and management. Piracy or copying key features is easy while providing adequate protection of intellectual property rights is difficult. Marketing software products in international markets at times requires localisation of the product itself as well as the marketing mix. Also, there is a dearth of talent for software product companies. We believe in blending innovation and simplicity into every aspect of our product and corporate cycle, whether it is research and development for future versions or it is about reaching out to our customers for technical support or it is about disseminating information to our partners for training or for sales, we come-up with ways to do it better and in an uncomplicated manner. Our products are now being localized to meet the requirements of a specific geography, for example we have Japanese, Italian, Polish and Arabic versions of our products. We are also tying up with Universities to provide courses that would empower the youth with skills required to work in software product companies.

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  • Where are the big growth opportunities in this segment and how do you plan to target these?

    As the increasing demand of smart devices such as smartphones, laptops, tablets, and personal digital assistants which are commonly used for both personal and business purpose showcase tremendous opportunity for us. The global mobile security market is segmented into authentication, mobile application management and mobile data protection. The mobile application management is more likely to increase as developers come up with more and more applications. The increasing dependence on applications, the frequency and length of usage of these applications would be one of the prime reasons for creating application security solutions. BYOD and VPN also drive the growth in mobile security. The enterprises allowing their employees to bring their personal mobile devices face security challenges in protecting corporate data without affecting the personal data of employees. Employee access to corporate network and data is another reason why customized applications are going to gain momentum. Minimizing the malware, data loss and other security breach effects is another reason why a robust mobile security solution should be in place. As mentioned earlier, we have quite a few products for the consumer segment and also a recent launch that combines insurance and security. We also have a Mobile Device Management (MDM) solution in place for the Enterprise clients and are in the process of designing specific mobile applications for target industries.

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  • Are you looking at partnering with device manufacturers in India? Please share more details?

    Currently, we don’t have any such plans in the pipeline.

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  • What is your go to market strategy to push your smart-device security solutions in India?

    As mentioned earlier, we are currently focusing on the target markets i.e. India and other developing countries. Consolidations are going to take time because peripheral services like that of ours are driven by the growth-movement of core services. There are other OS introductions waiting to happen in future that would further affect the macro which is the critical part. So being able to keep up with the action effectively and analysing strategies on the fly would be more like it.

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  • What are the top concerns of this segment that you trying to address?

    From email communication, banking, social networking, games, music and video, smart mobile devices have created a radical shift in the way companies and business organizations service their customers. There are also a lot of task-specific or third party applications that are easy to buy, install and provide ready access to information, utilities and services. Businesses and consumers are gradually realizing the importance of security for their mobile devices. People not only look at their mobile devices as significant investments, these devices contain a lot of personal data. Theloss or theft of these devices and increase in mobile malware attacks has emphasized the need for security in these devices. Security risks could range from simple rogue text messages to malicious attacks using malware. And with less awareness about mobile threats, people seem more inclined to fall prey to such attacks. The lack of security on these devices is also a major cause for concern. The more personal information that is stored in the mobile device whether it is data entered or information that can be used by an application the more at risk the user is for loss of money and even identity theft. While mobile banking does offer an immediate “always-on communication” the safety of this channel depends a lot on the user awareness and the financial organization’s safety precautions. If the device is not secure then there are chances that sensitive information such as credit card details, banking ids and passwords, etc. can be stolen through mobile malware or the device can be rendered useless in which case if the user hasn’t saved the passwords safely then there are chances of losing it completely.

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  • Security has become very important for smartphones and tablets as a lot of financial transactions are now happening through these devices.In such a scenario, how is your organization looking at this segment?

    We have observed that the mobile security awareness is gradually increasing and this is an interesting opportunity for us. We have quite a few products for the mobile segment.Our first Android security suite was introduced few years ago and is nowa freemium model. We have recently introduced a premium product that combines security and insurance. There are other OS introductions that are going to happen in the future. We are poised to keep up with the action effectively and analyse strategies on the fly if required. But we certainly see a significant contribution and growth in the coming years.

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