The author | Bai Qian
Edit | Tsukimi
On February 17, 2022, Russian-Ukrainian relations gradually deteriorated. This regional conflict has made cybersecurity a hot topic again. NBC News reported on the 25th that US President Biden is considering whether to carry out large-scale cyber attacks on Russia, including shutting down internet connections, shutting off power, and blocking trains from running. The Russian news agency reported that since the afternoon of February 24, Russia has been suffering from cyber attacks, of which about 27% are from the United States. Ukraine's Cybersecurity Center also said its Ministry of Defense website, private bank and state-owned bank Osadbank were all subject to DDoS (Distributed Denial of Service Attacks).
It is conceivable that once a conflicting front-line country encounters a large-scale cyber attack, it will cause serious damage to it, and the supply and command capabilities of front-line troops will also be hit. In fact, since mankind entered the information age, network security has become more and more deeply bound to national security. After the outbreak of the conflict in Ukraine, the world's major stock indexes fell, but the cybersecurity sector instead ushered in a counter-trend rise. This shows that anxiety about cybersecurity is driving the value of security companies.
For cybersecurity companies, this means the opening of greater market opportunities. How to deal with the complex development trend of the network security market will determine who can win this offensive and defensive battle.
01 What can Taiwanization bring to network security?
In recent years, the middle office strategy has increasingly become a hot word in the Internet industry.
In 2015, Alibaba CEO Daniel Zhang announced through an internal letter that Alibaba had launched a strategy of large middle office and small front office. In Alibaba's view, the basic combat units of the small half platoon of the US military are similar to the front desk, and the missile intelligent control system is similar to the back end. In terms of management, the front desk cannot effectively use the background resources, and the update iteration is slow, and the middle office will refine the common needs of the front desk, and make the background products into standardized components for the front office department to use.
For example, The Nordic game company Supersell, the developer of Clash Royale and Clash of Clans, has created a multi-billion dollar super revenue scale with less than 200 people, behind which is inseparable from the middle office architecture - Supersell has a unified payment, development, data, engine and other systems, and supports the front-line development department to develop products at the fastest speed. On the one hand, the middle office provides Supersell with a stable output capacity; on the other hand, the small and sophisticated front desk detachment can quickly adapt to the rhythm of the market.
In the field of cybersecurity, the construction of the technology middle office is equally critical.
On February 25, The domestic science and technology innovation board network security enterprise Qianxin released the 2021 annual performance express. According to the announcement, Qianxin achieved a total operating income of 5.81 billion yuan in 2021, an increase of 39.64% compared with 4.16 billion yuan in the same period of the previous year; total assets were 13.475 billion yuan, an increase of 5.51% over the beginning of the year.
It is worth noting the rapid growth of Qianxin in terms of revenue. In 2020 and 2019, the revenue scale of Qianxin was 4.161 billion yuan and 3.154 billion yuan respectively, corresponding to an annual revenue growth rate of 31.92%. This means that under the background of the rapid growth of the revenue scale base, Qianxin has instead achieved a speed increase in revenue growth. In addition, Qianxin also maintained an increase in gross profit margin.
The reason is that Qianxin's platform strategy is indispensable. Similar to the Internet industry, network security companies also have the problem of "repeating the wheel", such as the security needs of customers, and security companies often need to customize the development of new security products, which means that a lot of research and development resources are wasted.
The platform-based research and development of Qianxin is to disassemble security products in the form of "Lego toys"--the basic and core network security components are packaged into the research and development platform. After the Winter Olympic and Paralympic Games, the product platformization of Qianxin has been basically completed, "Kunpeng", "Noah", "Rael", "Zion", "Chuantuo", "Dayu", "Xuanji", "Qianxing" eight platforms will constitute the core part of the security products, with a single customer's customized special components, Qianxin can respond quickly to the customer's network security needs, and reduce the additional cost of repeated research and development.
The change in R&D costs shows this trend, due to the early layout of the platform, Qianxin's R&D expenses in 2021 are higher, and after the completion of the platform construction, under the improvement of the efficiency of the platform, it is expected that the related expenses will be greatly reduced.
From the perspective of specific business growth rate, the platform construction provides empowerment for The competitiveness of Qianxin in multiple industries. In the terminal security market in 2021, The total revenue of Qianxin exceeded 800 million yuan, an increase of more than 30% year-on-year, ranking first in the market share level consecutively; among data security and privacy protection products, the revenue of Qianxin products exceeded 1.1 billion yuan, with a year-on-year growth rate of more than 50%; in the situational awareness products, the revenue of Qianxin exceeded 1.2 billion yuan, with a year-on-year growth rate of nearly 30%. This means that the platform-based approach of network security enterprises is gaining market recognition, and with the growth of products and customer volumes, more financial data such as revenue and gross profit margin will verify the feasibility of this strategy in the future network security market.
02 The security "battlefield" behind the Winter Olympics
On February 20, as the fireworks of "One Family Under Heaven" bloomed over the Bird's Nest, the Beijing Winter Olympics ushered in a warm and romantic ending.
In this ice and snow sports event, As the official network security service and anti-virus software sponsor of the 2022 Beijing Winter Olympic and Paralympic Winter Games, Qianxin has carried out a lot of monitoring, research, blocking and handling risks. Relevant announcements show that during the re-insurance period of the Winter Olympics, Qianxin invested 3,500 network security experts and more than 600 front-line support personnel to monitor more than 240 million network attacks of various types, tracked, judged and handled 105 Olympic-related public opinion and threat incidents, found and repaired 5,782 security vulnerabilities, checked 150 risk hosts, and found 54 malicious samples. In the end, the Beijing 2022 Winter Olympics achieved the excellent result of "zero accidents" in network security protection.
Generally speaking, the service performance of the head customer in a field can be used as a benchmark for the external image and achievements of the enterprise, and can be directly used to strengthen the follow-up sales of the relevant track. For Qianxin, winning the cybersecurity offensive and defensive war of the Beijing Winter Olympics means opening more doors to the application scenarios of important units such as governments, financial institutions and large enterprise groups. Taking this opportunity, Qianxin completed the platformization of network security products in advance and its practical test in advance through the development and layout in advance.
In the 2021 performance report, a similar trend is reflected - throughout the year, Qianxin's revenue growth rate in the operator, energy, healthcare industry exceeded 50%, and the revenue growth rate of the government and financial industries exceeded 30%. Through the strict review of network security at the Beijing Winter Olympics, the practical experience of Qianxin products has been enhanced.
On the mainland, on the other hand, cybersecurity has been elevated to the heights of national strategies. In traditional security thinking, people divide a country's territory into four major areas: land, sea, air and space, and with the rapid development of the Internet, its importance cannot be ignored. In 2016, cybersecurity was placed in the "fifth frontier" of China's national sovereignty. In contrast, the U.S. government issued the International Strategy for Cyberspace in 2011, which lists digital infrastructure as an important national asset.
In 2021, the mainland has intensively promulgated important regulations such as the Cybersecurity Law, the Data Security Law, the Personal Information Protection Law, and the Regulations on the Protection of Critical Information Infrastructure to ensure the development of network security and industry norms, which means that network security is deeply bound to enterprise security and national security, as well as the rapid growth prospects of the network security market. According to IDC data, the investment scale of China's cybersecurity market will reach $9.78 billion in 2021 and is expected to grow to $18.79 billion in 2025, with an average annual compound growth rate of about 17.9%.
In overseas markets, as regional conflicts awaken more countries to pay attention to cybersecurity attacks and defenses, more potential markets are opening their doors to cybersecurity companies.
Related reports show that in 2021, Qianxin obtained a large order of 70 million yuan in the international market, mainly for the monitoring, tracking and analysis of APT (Advanced Persistent Threat). In the field of APT, Qianxin has released the first comprehensive APT organization disclosure report in China and named 14 global APT organizations for the first time. Among them, Qianxin has completed more than 100 APT threats and assistance in handling core institutions such as large enterprises and government organizations.
With the improvement of global network security awareness, the international market will become the next fertile ground for network security enterprises, and whether the performance of overseas performance is bright or not will determine whether network security companies can open up a second curve. The case of Qianxin's successful acquisition of overseas orders shows that enterprises with systematic and practical network security capabilities will be at the forefront of this industry competition.