Consumer Security: A Big Market?

Junk email, viruses, and worms may be a nuisance to most people but they could spell big business for data center operators -- because a growing number of consumers are prepared to pay for protection from the threats that lurk on the Internet.

Canadian security specialist Zero Knowledge Systems is aiming to tap this market with a managed security service that it plans to launch next week.

The service, called Synbridge, enables consumer ISPs to offer their customers a range of security add-ons, such as firewalls, virus protection, and content filtering. ISPs merely market and bill for the service, which is hosted in Zero Knowledges Montreal data center. The ISPs’ customers load software on their PCs that communicates with the servers hosting the service (to get their anti-virus updates, to block URLs, and so on) using LDAP (Lightweight Directory Access Protocol).

The service aims to tap the growing number of consumers willing to pay for protection from the dangers lurking on the Internet. Research from analyst firm Yankee Groupsuggests that over 20 percent of consumers are willing to pay up to $10 a month for security services.

Increasingly, ISPs and telecom firms are looking to cash in by offering managed security services to their customers. Earlier this week, for example, South Korean telecom provider Dacom Corp. announced its new Cyber Attack Defense Network (CADNet), a VPN service designed to protect customers from threats such as viruses and denial-of-service attacks (see Dacom Launches Managed Security).Zero Knowledge’s service pushes the envelope on these developments, according to Joe Lazlo, senior analyst at Jupiter Research. “I don’t think anyone has as comprehensive a suite of solutions geared to the ISP market as [Zero Knowledge] has.”

Patrick Mahoney, consumer technology analyst at Yankee Group, agrees. He says, “From what I have seen, they have a really good product, and can provide the ISP with a robust set of services for their consumers.

“They have really found a pain point for a provider and made a nice niche market."

But there could be a sticking point: Consumers may be willing to pay $10 a month, but evidently not much more. “Customers are very price sensitive where broadband is concerned," says Lazlo. "ISPs will have to watch how much of these costs they pass along.”

So far, six Canadian firms have signed up for Synbridge, including Bell Canada and Telus Corp. (NYSE: TU; Toronto: T).As well as using Synbridge to bolster security for consumers, Bell Canada also has 15,000 small-to-medium business customers using the service. Bundling security with existing services helps to retain customers, according to Justin Rivard, product manager for Bell Canada’s SMB division.

He says, “If a customer is on high-speed (Internet) and using security as well, they are less likely to cancel the other one – it does create more retention for us.”

It certainly seems that the message is getting out. Zero Knowledge has confirmed, albeit cagily, that it has recently signed up two ISPs in Europe and another in the U.S., although it is not willing to divulge their names.

And there could be enhancements to Synbridge in the pipeline. Hamnett Hill, president and CEO of Zero Knowledge says, “New things that we are looking at are everything from VOIP to backup.”

— James Rogers, Site Editor, Next-gen Data Center Forum0