Bloomberg News

F-Secure Chief Takes On Dropbox Seeking Growth in Cloud

March 07, 2013

F-Secure Oyj (FSC1V), the Finnish security- software maker expanding into online-storage services, is set to gain customers as more companies let employees use their own mobile devices for work, its chief executive officer said.

“It’s a fantastic thing for us,” Christian Fredrikson said in an interview at the company’s Helsinki headquarters yesterday. “We have the package ready, now we need to expand. It’s a business where we need to have tens of millions of users to become relevant, instead of the millions we have now.”

F-Secure is relying on its 25-year expertise in security software to challenge online-storage leaders such as Dropbox Inc. as businesses seek reliable ways for sharing files across computing devices. Cloud storage is a focus as F-Secure tries to revive sales growth, which has slowed for four quarters.

Organizations face security issues as BlackBerrys and other uniform devices supplied by employers are replaced by a myriad of different handsets, tablets and software applications. Policies regarding employees’ own devices will take shape this year in a way that balances user freedom and company asset protection, research company IDC said in January.

F-Secure is expanding beyond security software, which has been its bread and butter since the company was founded in 1988 by Risto Siilasmaa, now its chairman and also that of mobile- phone maker Nokia Oyj. (NOK1V) The company’s security knowhow and sales channels via phone operators help it survive among hundreds of competitors, Fredrikson said.

Dropbox, based in San Francisco, has passed the 100 million user mark, and technology giants including Google Inc. have also started their own storage and file-sharing services.

AT&T, BT

F-Secure sells its cloud service through phone carriers such as the U.S.’s AT&T Inc., and last month it added BT Group Plc (BT/A) as a provider in the U.K. Fredrikson declined to comment on its licensing fees for different products.

“The basic idea is that it’s secure and very consumer friendly, so that the consumer actually takes our product to the workplace,” said Fredrikson, who started as CEO in January last year. “It can’t just be safe and boring and pushed top-down, the product needs to be brilliant and I believe we have that.”

Shares of F-Secure gained 0.6 percent to 1.63 euros at 3:19 p.m. in Helsinki. They had declined 19 percent in the past year through yesterday. Trading volume exceeded 100,000 shares, more than the three-month daily average.

Support Lacking?

Analysts at Evli Bank Oyj raised their recommendation on F- Secure shares today to reduce from sell, citing growth potential in mobile security. Still, the fees F-Secure charges are likely to decline, they said.

“We don’t see major near-term growth drivers,” Evli’s Antti Kansanen and Mika Karppinen said in a note. “We remain cautious on the content cloud launches, as operators’ push for the products seem to be lacking.”

F-Secure’s sales increased 8 percent to 157 million euros ($204 million) last year, the 10th consecutive year of growth, according to data compiled by Bloomberg. The company last month forecast sales growth of more than 5 percent for this year.

“Wherever smartphone usage grows, that’s where we’ll find paying customers,” Fredrikson said. “We see our current sales growth only satisfactory, our target is to build for double- digit growth.”

To contact the reporter on this story: Kasper Viita in Helsinki at kviita1@bloomberg.net

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net


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