Software & Services

China's 1Q08 network security product revenues reached 1.345 billion Yuan, up 21.8% YOY. Beijing 2008 Olympics spurs demand, SaaS model expands, and security concepts and practices become more sophisticated.

Beijing 2008 Olympics demand IT security.

Such pressures come from multiple levels. The Olympics is a global affair, where constant, uninterrupted, up-to-date information must be provided to the media worldwide. This puts strict demands on IT systems, and such systems must resist intrusions and attacks.

As hosts for the Olympics, China's aviation, financial services, telecom, and government all have stakes and IT systems that must integrate seamlessly and securely.

Network security products, its application, and operational procedures and practices all become critical.

China's globalizing enterprises continue to adopt international-standard security audits and practices.

China's domestic enterprises that are entering worldwide markets must meet worldwide security standards, which include best practices, tools, and strategies. For example, Chinese enterprises that list in the U.S. must adhere to Sarbanes-Oxley, which has specific requirements on information protection levels, risk management, and internal governance, for example.

This has a spill-over effect. China's government and domestic industries, such as telecom, financial services and other large enterprises, also begins to enact similar security best practices and tools. Security audit products by Venus Info Tech, Hanbang, and Topsec Technology, for example, are improving and maturing to meet the market need. Gaps still exist on the "process side" of the product, such as associated consulting, product implementation, and ongoing security management.

Recognition of security management over "just products".

Especially for large enterprises and organizations, there is the recognition in China that security involves not just products, but also the concept of security management. Security management enables the integration of various, often disparate security software, hardware, and equipment; to realize the value of the information they provide; and to act appropriately on such information.

It is not just about technology, but also about integrating security management into business processes. And the technology and environment can be complex, with a security aspect at all levels, from the desktop to the server, from the physical environment to the network, and from event management to ongoing operations, to name a few.

At the user level, Baidu initiates the SaaS model, still new to China.

On Feb.27, 2008, Baidu, the leading search engine in China, announced an alliance with Kingsoft to offer an online anti-virus protection service to its users. This is significant, coming from China's leading search engine, and will spread the notion of the SaaS model to its vast user-base. The profitability and viability of the SaaS business model will also be tested.

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Ó 2008 CCID Consulting Co., Ltd.