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Jupiter Research’s Joe Wilcox points to a blog posting by Alex Eckelberry of security software vendor Sunbelt Software that crunches the numbers for Microsoft’s Windows Live OneCare and Antigen enterprise security products and concludes that Microsoft practices predatory pricing:
I don’t often write pieces lambasting Microsoft. I have close friends who work for the company (incidentally, some of the brightest people I know), my company is a Gold Partner and we’re also in business with Microsoft. And, I am one of those who believe that the computing world has actually been made a better place by Microsoft.My beef is never with the people. My beef is with a number of strategic decisions that have been made by the company that should scare a lot of people. So please, to my friends at Microsoft, don’t take this personally. This stuff just needs to be said.
It’s bad enough that Microsoft is getting in to all aspects of security. But now they are going to kill their competition through predatory pricing.
Hit the link for the calculations, but for Windows Live OneCare, his conclusion is that it is “almost 50% below the market leader, and no one has said a peep.” That seems somewhat overheated since the OneCare MSRP of $49.95 for three machines is easily its most notable aspect and has received quite a bit of comment here and and quite a few other places. It’s also overshadowed by the oddities of the delivery mechanism for consumer security products which generally appear as a trial offers preinstalled on new PCs and based on adoption statistics, seem to be mostly ignored.
More telling is his analysis of the pricing for Microsoft’s Antigen enterprise security products:
Now, let’s move to the enterprise side, specifically virus protection for Microsoft Exchange. Remember that enterprise sales are the bread and butter of companies like Symantec and Trend. This is where the money is made.Examine the latest pricing for Microsoft Antigen, the old Sybari product re-branded under Microsoft’s new Foreforont line of security products.
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As we can see here, Microsoft has priced themselves over 60% less than Symantec, an astonishing difference in price. Microsoft has effectively low-balled the entire antivirus industry in one fell swoop. And their product includes five antivirus engines, not just one.
There’s much more there, but here’s a closing thought:
What should be disturbing about of this all is that we very well might see Microsoft owning a majority in the security space. Despite what their PR flacks tell us, they are hell-bent on getting your business. Look at the Forefront website for yourself. These people mean business. Maybe I’m jaded, as I’ve spent most of my career working for companies that got pummeled by Microsoft (Borland, Quarterdeck, etc.).Stifling innovation? You bet. What venture capitalist will invest in the next great security idea or product? What entrepreneur will start a new company in the security space, given the risks of competing with Microsoft?
And it’s not just startups. For example, after Microsoft announced the acquisition of Giant Company, a senior executive at a major security company told me that they weren’t going to bother coming out with antispyware functionality, since Microsoft had already made that product free. While that company has since changed their mind, it was a chilling conversation.
As I’ve mentioned before in regards to Windows Defender (antispyware), Windows Live Safety Settings, and application transfer applications, there’s no more predatory pricing than free and I can’t help but believe that Microsoft’s heading for another confrontation with antitrust regulators around the world.
It’s not official, but Robert McMillan has the scoop at PCWorld:
Microsoft will complete its entry into the desktop security market next week with the general release of its Windows Live OneCare antivirus software.OneCare, which also includes backup and PC-tuning software, has been available for free in beta form since November, but as of next Thursday customers will be able to purchase the final, supported product, according to sources familiar with Microsoft’s plans.
OneCare will cost $49.95 per year, which will cover licenses for as many as three Windows XP PCs. That means “98 percent of homes in the U.S. will be able to buy one subscription and be able to cover all of their PCs,” Microsoft Group Program Manager Brian Hall said in an interview earlier this year.
Since that’s about what the existing vendors charge for one machine, it’s a new price point in the market.
Market leader Symantec, which sued Microsoft last week claiming misappropriation of intellectual property, is clearly anxious about the software giant’s entry into its market space.Company executives have said that they expect to compete against Microsoft by offering superior technology and staying one step ahead of their new competitor. “Microsoft is very much focusing on the old-world problems of viruses and worms,” according to Symantec Chief Financial Officer James Beer, speaking Monday at the JP Morgan Technology Conference, in San Francisco. “We’re focusing on what we would call the new-world problems.”
These “new-world” problems seem to be phishing, identity theft and related issues.
I tried the OneCare beta, but had problems with excessive CPU utilization so gave it up. I assume that in due course it will be a “good enough” offering for most people, so the question is whether the price and the fact that it is from Microsoft gives them any leverage in the market. It will also be interesting to see the extent to which Microsoft bundles OneCare subscription opportunities in the client OS, particularly Vista.
Per the Associated Press:
Trend Micro Inc., a maker of antivirus and network security software, said on Monday it received an extension on a 2004 contract with Microsoft Corp. to provide antivirus scanning and cleaning services to 230 million MSN Hotmail e-mail accounts.
Financial terms of the deal were not disclosed; nor did the company say for how long the contract had been extended.
Apparently the Microsoft server antivirus products (Microsoft Client Protection, Antigen) don’t apply, aren’t ready yet, or can’t handle the considerable Hotmail load.
Ryan Naraine at eWeek:
LAKE BUENA VISTA, Fla. – In a rare discussion about the severity of the Windows malware scourge, a Microsoft security official said businesses should consider investing in an automated process to wipe hard drives and reinstall operating systems as a practical way to recover from malware infestation.
Yikes – don’t encourage them! My experience with large corporate IT departments is that their answer to just about any nontrivial problem is wiping the machine. Of course, the statement is actually more explicit:
“When you are dealing with rootkits and some advanced spyware programs, the only solution is to rebuild from scratch. In some cases, there really is no way to recover without nuking the systems from orbit,” Mike Danseglio, program manager in the Security Solutions group at Microsoft, said in a presentation at the InfoSec World conference here.
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He cited a recent instance where an unnamed branch of the U.S. government struggled with malware infestations on more than 2,000 client machines. “In that case, it was so severe that trying to recover was meaningless. They did not have an automated process to wipe and rebuild the systems, so it became a burden. They had to design a process real fast,” Danseglio added.
I guess the government isn’t keeping up with the private sector in this regard. I hope they at least had automated data backup. More details on Danseglio’s view of the current state of the malware situation and remediation measures by following the link.
