Analysis of Trend Micro Systems - Who they are and where they're going
P.Hayes - February 7th, 2000
former Hewlett-Packard engineer, Steve Chang, the present CEO of Trend Micro,
founded Trend in 1998. Trend Micro's first anti-virus products were released
in early 1990 with marketing primarily focused on Japan, Taiwan, and US markets.
Trend has evolved its product line since then, and its present approach to virus
protection is server-centric, using a top-down methodology.
Trend is publicly traded in both the United States (Nasdaq: TMIC) and Japan
(Japan OTC: 4704). Trend Micro boasts a Market Capitalization of $14 Billion
(USD) and has been trading on the Nasdaq in the low twenties following a 3-1
stock split. Trend Micro generates over 90% of is revenues from product sales
and less than 10% from services. Of the 90% product sales generated by Trend,
80% is accounted for through Channel Sales with no Exclusive Channels. Trend
selects resellers geographically, assuring a competitive advantage and leads
for the select resellers in any given region.
Micro has over 750 employees and has the largest virus research team in the
anti-virus technology arena. Trend is also the largest anti-virus vendor in
the Pacific Rim and is growing steadily within the US market. According to IDC,
1998 revenues for the anti-virus market were 1 Billion (USD), up a staggering
28% from 1997 anti-virus software revenues.
recent 'Melissa' virus, which affected more than 300 organizations within 16
hours of its release, had a serious impact on the technology markets' view of
anti-virus software. During the first half of 1999 alone, viruses have wreaked
havoc on the Internet and corporate networks, causing over 7 Billion (USD) in
Micro views its major competitors as Network Associates and Symantec. In 1998
Network Associates at 44% had the lion's share of anti-virus software revenues,
Symantec had 25%, while Trend had 9%. Trend produces a complete array of anti-virus
software using a server centric viewpoint. Trend Micro's products include e-mail
components, gateway components, desktop components, and central management utilities.
Trend Micro updates virus pattern files on a weekly basis, or on an as-needed
basis when dangerous viruses strike.
Strategy and Trajectory
Micro is attempting to gain a greater percentage of the anti-virus software
market share through a combination of robust platform support, partnership alliances,
and increased human intelligence within its virus research team. Trend is looking
to increase the number of ScanMail resellers through establishing additional
currently supports Windows NT, Novell Netware, Linux, HPUX, AIX, IBM OS/2, IBM
AS/400, and IBM S/390. Trend is also moving to an ODBC compliant architecture,
which will support, text, SQL, and Jet database formats for their product line.
Trend has partnered with Lotus, Cornerstone Systems, Check Point, Cisco, Axent,
ISS, HP Covision, IBM S/390, Lucent , Microsoft, kforce Consulting, and RealXpress.com.
is also looking to evolve from a product to a service with service partners
who are ASPs providing e-mail hosting, which will then be coupled with the ASPs
service offering. These service partners include, Infonet, Inernoded, US West
Hosting Solutions, and UUNET. Trend will continue to develop additional partnerships
to allow a strong entry into the service provider space.
Micro's strengths lie in its server centric anti-virus software packages. This
is due not only to the ease of configuration and implementation of its products
and the speed at which they work, but also to the advanced anti-virus technology
behind it. With the largest anti-virus software research team in the world,
Trend is able to produce virus pattern file updates instantly; thus protecting
its clients from potential disaster while attracting additional potential buyers
to its package.
also offers an anti-virus management console, believing that centralized anti-virus
control is the only form of control. Trend produces a component of an enterprise
wide anti-virus protection system for each file/print, email server, desktop,
or gateway on your network.
primary challenge is to expand its market share within the anti-virus software
arena. Through a series of partnerships and alliances they are heading in the
right direction. Trend is doing well in the server market, but has less than
5% of the desktop anti-virus market. Symantec and McAffee have a significant
foothold on the desktop arena, which may make that particular segment of the
anti-virus software market almost impenetrable in the short term.
recognition is another key factor affecting Trend today. To overcome this obstacle,
Trend is continually attending conferences and widening its channel sales force,
in addition to the partnerships and service partnerships, which are currently
in place. Trend began its sales in Asia. It has a foothold on the Pacific Rim,
the source of the majority of its revenue, where its name is well known.
Service and support represent a challenge to Trend as its installation base
defies geographical boundaries, and its surprisingly rich platform support adds
to support complexity. Trend intends to provide additional training to its support
staff, while offering incentives to overcome these issues.
to see Trend Micro double its market share in the anti-virus field to 20% by
the 4th quarter of 2002. Trend will rise to the top of anti-virus gateways in
use on the Internet.
Micro has recently struck a strategic alliance with Sendmail, which has 75%
of the 8,000 ISP's mail routing systems. If successful this alliance will enable
Trend to be able to sell to up to 6,000 ISPs for gateway and email anti-virus
have referred to Trend Micro as " The future anti-virus backbone of the Internet"
and the alliances Trend has made will help propel it to the next level.
Trend must continue to increase name recognition through a series of partnerships,
alliances, channel sales, presence at trade shows, and press releases.
Trend Micro must continue to improve the ease of installation and configuration
through its research and development departments; thereby making the product
more desirable to those clients who may not have funding to pay for external
must also improve on the existing security levels contained within its products,
to eliminate the number of "found and recorded" viruses finding their way
into the wrong hands.
Micro offers one of the best server based anti-virus software solutions in the
industry today. If you have Lotus Notes, Microsoft Exchange, cc:Mail, MS Mail,
or HP Open Mail and do not have an anti virus server in place, Trend should
be included on the short list for enterprise wide email virus protection.
Micro (Nasdaq:TMIC) is the first anti-virus server to reach Checkpoint Level
1 certification (for Microsoft Exchange). ScanMail, through its combination
of enhanced anti-virus processing of both inbound and outbound mail, coupled
with its content filtering, should be viewed as a leading anti-virus server
product and should not be overlooked when implementing an anti-virus protection
Trend protects beyond email, offering Interscan for gateway scanning; a central
control model called Trend Virus Control System (TVCS) for management; OfficeScan
for the desktop; and eDoctor, which when coupled with TVCS enables global alerting
stated, Trend probably has an anti-virus solution for your environment. If you
are making a technical choice regarding anti-virus software implementation,
make sure to look at Trend Micro.