Kaspersky Lab Partners Keeping Eye On Deteriorating U.S.-Russia Relations

Kaspersky Lab executives are assessing any potentially negative fallout the rapidly deteriorating Russia-U.S. relations could have on its U.S. business strategy. Longtime partners with the endpoint security vendor tell CRN they are watching the rising political tension closely, and acknowledge that economic sanctions threatened against Russia could have a serious impact on their business.

Senior executives from the company's headquarters in Moscow are reviewing the potential impact of sanctions and any negative fallout against the brand. The topic may be discussed at high-level executive meetings in Europe, according to a source close to the company. The issue is complex. While Kaspersky Lab global headquarters and its research and development team are in Moscow, the company's financial holdings are in the U.K.

Diplomatic relations continue to deteriorate between the U.S. and Russia, putting pressure on Kaspersky Lab executives who are trying to sustain strong momentum in the U.S. endpoint security software market against chief rivals Symantec, McAfee, Trend Micro and Sophos. The Obama administration is considering asset freezes, travel visa bans and sanctions on banks as a response against Russia for sending troops into Ukraine’s Crimea region. The Russian military reportedly has operational control over the Crimean peninsula, with about 6,000 air and naval forces in the region.

[Related: Kaspersky Lab Fires Up Partners, Anticipates Double-Digit Growth in 2014 ]

Increasing tensions between Washington and Moscow in recent years have not had any negative repercussions on sales in the U.S., said Todd O'Bert, CEO of Minneapolis-based Productive Corp., a Kaspersky Lab partner and member of the company's partner advisory council. O'Bert told CRN he is watching the current dispute closely for signs of how sanctions could hurt sales. Kaspersky Lab represents between 10 percent and 15 percent of Productive's business, he said.

"The relationship between the current administrations of both countries has been tenuous at best over the past six years, but that hasn't had any impact on our ability to sell Kaspersky Lab to our customers," O'Bert said. "From a business point of view, we feel that Kaspersky has made an effort to be a global company and not a Russian company, and I think they are continuing on that path."

Kaspersky Lab has a strong product portfolio and growing brand recognition, making it the flagship product at Pembroke Pines, Fla.-based Salvant & Associates Technologies. Salvant has been successful selling the security software to local governments, said Carl-Henry Salvant, president and CEO of Salvant & Associates. Salvant told CRN the political dispute has thrust his firm into uncharted territory with the security vendor.

"We've done business with other Eastern Bloc companies and usually relations improve over time, not escalate, so it's not something we've had to deal with before," Salvant said. "I think that it's going to definitely hurt them and all the work they've done to showcase the Kaspersky brand."

Kaspersky Lab executives declined to comment on Monday. The company launched a named account strategy in February in conjunction with a platinum-support level for enterprises. Speaking to CRN at the company's 7th Annual North America Partner Summit in Punta Cana, Dominican Republic, last month, Stephen Orenberg, president of Kaspersky Lab North America, said the firm is working hard to establish stronger ties at the federal level, including opening a Washington, D.C., office to improve relations. The firm held its first Cybersecurity Government Forum in Washington, D.C., last summer and is planning to hold a similar event again this year, Orenberg said.

"The fact that we've got strong thought leadership in the area of cybersecurity and strong ties with global law enforcement, we feel we have been -- and will continue to make -- a positive contribution on these important issues," Orenberg said. "We've never ran into a situation where an end user or partner doesn't want to look at the technology because the R&D is in Moscow; it's a nonissue."

Kaspersky Lab has seen growth among U.S. small and midsize businesses. The company's Endpoint Security for Business is said to have a 13 percent global market share, according to IDC. Because of its significant user install base in the U.S., any kind of attempt to block activity through economic sanctions would probably backfire for the U.S., said Pete Lindstrom , principal analyst at Spire Security.

"It's not necessarily the ability to perform that matters; it’s the negative perception involved because you're dipping into the unknown," Lindstrom said.

It's unclear what extent sanctions would have on current U.S. business partnerships. Speaking on NBC's "Meet The Press" over the weekend, U.S. Secretary John Kerry said the regional dispute could result in asset freezes, visa bans and a disruption of trade. Kerry said Russia could be kicked out of the G-8 if there is no immediate resolution to the dispute.

’American business may pull back,’ Kerry said.

PUBLISHED MARCH 3, 2014