QUICK HEAL CASE STUDY

“Apke computer me kaun hai? Virus ya Quick Heal?”

This famous slogan of Quick Heal has made it very popular among people, its simple mantra “Security Simplified” has made a home in people’s heart for all of their computer security issues…

Quick Heal Anti Virus 1st phase

How it started? And before Quick Heal

Mr.Kailash Katkar Founder of Quick Heal was born into a Maharashtrian family in a small village

at Rahimatpur, Maharashtra and grew up in Pune. His father was a machine setter in electrical

company Philips in Pune and his mother was a homemaker. He completed his matriculation in

1985; he took up a job at a local radio and calculator repair shop to support his Family. He had a

keen interest in technical things; he learnt to repair office gadgets such as Facit adding

machines, desktop electric calculators and ledger posting machines.

In 1990 he leased a small 100 sq ft office in Pune and started his own calculator repair shop

with an initial seed capital of Rs 15,000. Within first year he earned a decent income of 45,000

Rupees. But in the unsettling desire for greater success; he started his new venture known as

CAT Computer Services in 1993 parallel to his calculator repair shop. In September 1993, he

won the Annual Maintenance Contract for New India Insurance, followed by another group a

month later. In the first year he managed to generate a turnover of Rs 1 lakh.

While in Annual Maintenance Contract, Kailash Katkar realized, people faced computer virus problem, and cost of anti-viruses were about 12000-15000 Rupees. Whenever there was a computer virus problem computer maintenance companies had only one solution – formatting, re-installing dos and uploading entire data again.

Meanwhile his younger brother, Mr Sanjay Katkar was perusing his education in computers (BCS &MCS). Kailash encouraged his younger brother to come up with some solution for virus problem, that is, to develop an antivirus tool which can be used to tackle virus without formatting computer. Sanjay came up with a tool called as Michelangelo which was used to remove virus named Michal Angelo.

Kailas Katkar distributed this tool for free to his costumers, and whenever his costumers faced any problem regarding virus, based on the symptoms, Mr. Katkar guided his costumers over phone to fix the problem. And so Sanjay continued to develop tools for different viruses. Both the brothers were successful in gaining lot of costumers under Annual Maintenance Contract.

Problems faced during 1st phase

1. Mr. Kailash Katkar was new to this field and had very little idea about how to market the product. Both brothers didn’t have enough finance to start up their venture on a big scale. Boot Strapping was the toughest part.

2. CAT Computer Services had tough competition from leading Antivirus brands such as Norton and McAfee.

3. They did not get help from any source such as Intel, Microsoft (As other antivirus companies had these hardware and software companies like next door, and they could go to them for any problem regarding development, maintenance etc. But Quick Heal had no such support and the two brothers had to solve such problems on their own).

Quick Heal 2nd phase

Kailash was encouraged by his costumers to develop anti-virus software. Taking this as a challenge Sanjay started working on developing anti-virus software.

In 1994-95 Quick Heal’s first Antivirus software for DOS was launched followed by Win 3.1 in 1995 and Windows 95 in 1996.

Now the next biggest challenge before Mr. Katkar was marketing this software. Being a technical person Kailash Katkar lacked marketing Skills. He tried selling this antivirus software by appointing a separate marketing team but it did not work. Quick Heal was an Indian product, and it had huge competition with leading companies such as Norton & McAfee. Kailash did not admit defeat, he went on, and taught his friends from Computer Maintenance Association, how to market the software and how to give maintenance service. Now he started gaining a decent number of orders.

Kailash welcomed suggestions, comparisons, he took them as challenges and used them constructively and both brothers kept on developing the Antivirus software. In around 1998 they hired 2 software engineers.

Quick Heal launched its Corporate Website, www.quickheal.com in 1998 with an inclusion of the product portfolio and a history of the company.

The Company got the first Check Mark Antivirus Level 1 award from West Coast Labs on Windows XP in 2002 followed by the 1st VB 100% award for Windows 2000 Advanced Server. Mr. Katkar developed a Distributer Channels to market his product. And the product was well received in Pune and started moving all over India. Till 1998 Kailash continued computer maintenance, but he had to stop it and concentrate solely on Quick heal.

The company faced problems in funds because distributors took more time to pay them. Partners never used to pay on time and banks, angel investors refused to give loans. In year 1999-2000 both brothers thought of closing the company as it had become very tough financially, but they never lost hope, they motivated each other and continued the journey.

They analyzed where they are going wrong? What mistakes they are making? Upon analyzing they found that they lacked good marketing people. Soon they found some good marketing people through a half page advertisement in Times of India. Meanwhile Mr.Kailash realized that he could do well in Pune because he can directly connect with people; he decided to move to Nasik as he thought that he could expand his business more, as Nasik was similar to Pune.

The first branch office of Quick Heal was opened in Nashik in 2003. Before moving to Nasik the revenue from Nasik was about 8000-10000 Rupees and after opening the branch office, within one month they could generate revenue of about Rupees 1.5 lac.

This motivated him even more and Kailash Katkar decided to do distribution on his own.

Now he stopped the old distribution method and started developing channel partners instead of distributors. Within 3-4 months they opened branches in Nagpur and Mumbai. In next 6 months they started branch in Vadodara and Indore.

In 2005, Quick Heal introduced DNA Scan technology which is capable of detecting unknown viruses in real time without depending on latest signature patterns & it released Quick Heal 2005 Corporate edition 2.0. Quick Heal Technologies was the first to detect Black worm. Quick Heal PC Tuner received Microsoft certification for Windows Vista. In 2006 Quick Heal had a deal with Microsoft for bundling of Antivirus with Genuine Windows XP, MSWGA.

In 2007 CAT Technologies was renamed as Quick Heal Technologies Pvt. Ltd. A dedicated Research and Development center with a team of experts was created. In an effort to fortify the post-sales services, sales and support, branches were opened in Aurangabad, Coimbatore, Vizag and Cochin in 2008.

Problems during 2nd phase

1. Sanjay had to depend solely on books for developing software because; practical knowledge of software development was not given in schools in those days.

2. Banks and investors refused to fund the company, as it being a software company.

3. Marketing was a huge problem as Kailash was a technical person and distributors didn’t pay on time.

4. Software vendors refused to buy Anti viruses from them giving various trivial reasons.

3rd Phase of Quick Heal

Present scenario

Quick Heal has developed in an excellent way. Not only Antivirus but Quick Heal also provides number of solutions like, desktop security, mobile security, network security and cloud-based security, Endpoint Security, Android Security, Unified Threat Management Solution which include Quick Heal Core Antivirus Engine, Firewall, Web Security, VPN, Load Balancing, Web Content Filters, Antispam technologies, IDS/IPS (Intrusion Detection/Prevention System) and Bandwidth Manager.

Quick Heal presents different products ranging from Home Products to Enterprise Products.

Companies like Intel, Microsoft send their new product’s beta version and hardware to Quick Heal one year before to test the product and to develop product which will be compatible to the new OS, Hardware etc.

The company has more than 8 million customers in 60 countries. The company has strong global presence with offices in Dubai, Japan, USA and Kenya. It plans to strengthen the staff strength in these offices and is looking at opening new office in Europe and Australia in the near future.

Quick Heal is doing excellent across globe, in Japan Quick heal has got its Japanese version and it is well received. Quick heal is the first Indian venture in Mobile security. Quick heal is termed as channel king due to its excellent channel management. Quick Heal claims a 35 per cent market share in India's consumer anti-virus market. The Quick Heal products are internationally certified by ICSA Labs, AV-Test, West Coast Labs UK and more. It has also won numerous national and international awards.

Quick Heal Technologies employs more than 1400 people across 33 branches in the country. Quick heal focuses on customer needs and strive to give total consumer satisfaction. Unlike most of Quick Heal’s larger competitors, the company, for the major part of its existence, chose not to spend on marketing and advertising its products. Instead, it used that money to deepen relationships with distributors and retailers around India, sharing 15-18 percent of the revenue from each product sold. As a result, it claims to have between 12,000-15,000 channel partners around the country.In 2010, Quick heal was valued at Rs 600 crore, when Sequoia invested Rs 60 crore for a 10 per cent stake.Sales have grown from Rs 10 crore a decade ago, to over Rs 215 crore in FY 13 crossed Rs 250 crore mark in FY 14.

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2003-04 2013 2014 2017 Target

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DISTRIBUTION STRATAGY OF QUICK HEAL

WORKING

Quick heal’s main branch looks over all the sub branches and channel partners. Sub branches and channel partners receive a target to fulfill and they work to achieve the same. They distribute the products to the retailers who further reach out to costumers. Support centers play a vital role in maintenance and providing after sale service to customers. Quick Heal has branches in around 32 cities across India. Quick Heal partner network is spread across 60 countries over the world. It collaborates to give customers the best possible solutions. The company takes pride in assuring that customers and partners are connected for mutual benefit. The company provides aggressive profit margins and offers attractive schemes, making it convenient for partners to generate more revenue.

Core Competencies of Quick Heal

Quick Heal products are so designed keeping customers, manageability and ease-of-use in mind. Quick Heal is at par when it comes to features as compared to the competition but does have some unique additional features. Unique features like PC2Mobile Scan that scans and cleans your mobile phone from your PC and Safe Banking that identifies all the Indian bank websites and protects user’s transactions conducted on any of these banking websites by loading the browser in a sandboxed environment. Other advantages that Quick Heal offers to its customers are: complete product portfolio and a tailored approach, proximity to customers through an extended services and support network throughout India and through a strong channel partner ecosystem across the globe. Excellent Customer Support Infrastructure separate for Retail and Enterprise. The different types of multilingual support available are Email, Chat, Telephonic, Remote and Local. Strong Quick Heal brand recognition and reliability. Control over technology components through its own production facilities,”

Present Market scenario for Anti-Virus companies:

1. A recent survey conducted by Norton uncovered that 62% of online adults have been victims of cybercrime. This has amplified the need for India’s connected population to deploy effective antivirus solutions that make security simpler.

2. Demand for the tablet security and mobile security solutions are increasing day by day.

3. Even though large number of people uses free AV this is coming down as now with increased threats the free AV’s cannot protect real time as compared to paid AV’s. The current scenario in AV market in India among home users / Retail is on growth path at an approx. rate of 20% plus as the awareness for use of licensed and paid AV is increasing day by day and this coupled with the reduction in cost of Antivirus software.

4. Free and pirated software are estimated to have almost nearly 60% of market share. So lot of work need to be done in terms of customer education and awareness.

5. India is one of the most vulnerable countries worldwide when it comes to smartphone security risks. The biggest focus area is to make people aware of this and protect them so that they are safe online.

6. Most dangerous threat at the moment is BIOS chip hack. BIOS chips are used to boot a computer and load the operating system, but the malware would remain even if the operating system was removed and re-installed. Another most dangerous threat considered at the moment is the rise of targeted attacks. Targeted attacks will continue to become more sophisticated in 2016.

Present Challenges before Quick Heal

1. Quick heal faces a tough competition from other Antivirus companies in USA. Quick Heal has not got desired response in developed markets like USA, Europe & UAE.

2. Current Turn Over is around 300cr while company is targeting 750 cr till 2017.

3. The ever changing environment of cyber security, Cyber War and threat; Quick heal has to be on its toes to tackle these new problems.

4. The availability of open-source antivirus software poses a challenge to the growth of this market.

5. The other reasons being rapidly changing customer requirements and increased competition among vendors that makes it impossible to engage in premium pricing but on the other hand it also makes the availability of security solutions to customers at lower costs.

6. Market conditions continuously change, so it needs to keep on revisiting and updating business plans regularly

7. Strong competitions amongst the vendors, price wars, availability of freeware as well as piracy of security solutions are constant. The Indian market is not only price-sensitive but quite uncontrollable.

Questions:

1. Do SWOT analysis for Quick Heal Technologies

2. Should Quick Heal go for an IPO? Why?

3. Suggest Integrated Marketing Strategy for Quick Heal to succeed in Developed Countries.