"I am looking forward to working with our partners in this dynamic market over the next 10 to 15 years," said Skip Glass, chief executive officer and president of Filanet, a network security solutions provider for SMEs.

According to statistics from the Ministry of Information Industry, the network security market grew by more than 40 percent in the first quarter of this year over the same period last year to 350 million yuan (US$42 million).

And SMEs remained under-represented. In spite of the fact that more than 95 percent of China's 12 million Chinese enterprises are SMEs, their spending on security products only accounted for 5 per cent of the total network security market.

A report by information industry researcher CCID Consulting Co Ltd predicts that in the coming five years, the total spending by SMEs on security products will rise to 1 billion yuan (US$120 million), about 40 percent of the total network security market.

With such encouraging news, network security product makers have begun to prepare for the rapid growth.

Filanet, which set up its first office in Beijing in July, said it is in talks with more than 15 local distributors and system integrators regarding the distribution of its products in China.

The company has already found a local partner named Beijing Chienventure Total-E Co Ltd to train users, market products and install software.

Filanet will first target government offices, banks and transport businesses whose employees need to access headquarters on business trips or from local offices.

Filanet's products, InterJak 200 and 300, are priced at US$400 to US$1,200 to make them affordable to Chinese customers.

Glass said in an interview yesterday that Filanet's revenues in the Chinese market could reach US$100 million in two years.

He also revealed that his company will start local production next year to strengthen its competitiveness.

Meanwhile, Kingsoft Software, one of the biggest local software makers, cut the prices of its Internet-based anti-virus products on September 11 from 199 yuan (US$24) and 129 yuan (US$15) to 50 yuan (US$6).

"This is another bold move by Kingsoft to expand our presence in the market," said Wang Feng, Kingsoft's vice-president.

The company was one of the top three domestic anti-virus software makers last year, but still lagged behind international vendors in network security products.

(China Daily September 26, 2002)