What’s an anti-virus security software company like Trend Micro got to do with clouds?

Well, they believe that the next big IT disruption will be cloud computing. Moving into security for clouds is thus a necessary evolution path for the 21-year old software security company.

After their Asia Pacific media day conference in Macau today this point was made really clear. Let me explain.

Customers rightly expect the software they’ve bought to just work. Security should be baked into the product rather than bolted on as an additional cost. The good news is that we’re moving towards this trend, e.g. operating systems bundled with anti-virus and firewalls, etc.

Thus, security companies are getting bought up left and right by telcos, networking companies, software giants and middleware players (e.g. Microsoft, Oracle, Google) and incorporated into the IT infrastructure.

However, as a mid-sized IT software MNC in the security space, what are your plans? Hope to get bought out, ride the market on existing products, or try to carve up new territories to play in?

Trend Micro chose the later. With the anti-virus software business becoming an evolutionary dead-end in the future that will not provide much growth, why not use this time to bridge out into new markets?

Cloudy with a chance of striking the jackpot

For Trend Micro, they believe it lies in security for clouds (both private and public).

In April last year, Trend Micro acquired Third Brigade, one of the pioneers that looked at providing security for the nascent cloud industry. According to CEO Eva Chen, they had been reselling Third Brigade’s solutions for about eighteen months before deciding to acquire the company. Third Brigade does a lot of work with VMWare to provide security solutions to their virtualization platforms, and this seems like a sound business model (virtualization is a no-brainer, as I’ve said before).

I talked to Oscar Chang, the Chief Development Officer and R&D head honcho at Trend, about the recent acquisitions in the last two years their competitors were making, like Symantec buying MessageLabs and McAffee buying MXLogic, both email SaaS security players.

His comment was simply “We looked into it, but do we really want to do just email?” His fervant belief is that as we move into a world where more apps get virtualized into clouds, companies will start to outsource their apps elsewhere. Including things like email, which is just one example of an app. So rather than concentrate on one app, look at the broader underlying trends — virtualization and clouds.

I buy the vision, and I think Trend Micro has a good read on the long term trends. Kudos to them for also trying to stake a thought leadership position (hence the media day!) in this area.

However, short term, it won’t be that smooth of course. The market is not yet ready, and needs time to mature. Trend Micro’s anti-virus business and the cloud security business doesn’t seem to have any synergy, and probably needs to be run separately (with different channel partners, etc.)

Another interesting point: CEO Eva Chen believes that a lot of cloud infrastructure will be driven by government investment. In particular, by Asian countries like China, because a national cloud infrastructure will be immensely useful to tech start-ups and SMBs.

And being an Asian MNC that is headquartered in Tokyo, she believes that Trend Micro has a good understanding of the geography and culture of the region. Food for thought.