Microsoft's predatory pricing of security software
Summary: SunbeltBLOG has posted an analysis of Microsoft’s pricing for their new security products, One Care and Antigen, calling Microsoft on predatory pricing aimed at putting the rest of the security vendors out of business.
SunbeltBLOG has posted an analysis of Microsoft's pricing for their new security products, OneCare and Antigen, calling Microsoft on predatory pricing aimed at putting the rest of the security vendors out of business. Even though Sunbelt Software is in the security business, too, I don't think this is sour grapes. Others have written similar pieces, but SunbeltBLOG breaks down the numbers.
No one should feel "abused" by the big AV companies because there are free alternatives.OneCare is aimed at home users and small businesses, combining firewall, anti-virus, anti-spyware and some utilities for disk and file management. OneCare is going for $49.95 for up to 3 machines and a one year subscription. I saw some sales for OneCare at $14.95 this weekend. Antigen, acquired from Sybari last year, is an enterprise application for email, SMTP, and Exchange server protection from spam and viruses. Forefront is also in the wings, not released yet, called a "family of business security products" that includes anti-virus, anti-spyware and more, see description here. I saw a demo of Forefront running on a client machine at Tech Ed, and while it looks nice I wasn't so impressed that it uses the same definitions as Windows Defender for adware/grayware (they did not call it spyware), and the same definitions as the Malicious Software Removal Tool for viruses, worms and trojans.
SunbeltBLOG compares the numbers, pricing for the Microsoft products to comparable products from Symantec, Trend Micro and McAfee, showing how Microsoft is undercutting their prices by as much as 44% for OneCare and as much as 63% for Antigen. Pricing is not available yet for Forefront. Should we be concerned? Alex Eckelberry writes:
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?
Jupiter Research seems to be in agreement -- write up is here. Kevin Murphy of Computer Business Review Online wrote about similar concerns in February.
The other question about Microsoft's venture into the security business is this: Would you trust Microsoft alone to protect your network or your home computer against viruses and spyware? SunbeltBLOG has just posted a poll here. So far the results are not favorable to Microsoft.
While I applaud Microsoft's efforts to make Windows Vista a more secure operating system, it seems to me that security has been an afterthought with Microsoft. Remember, Microsoft became concerned with spyware after Bill Gates' home machines got infested. At any rate, I'm interested in readers' opinions about Microsoft's pricing of security products and whether or not you'd trust Microsoft's products to protect you from viruses, trojans and spyware.
Disclosures: I'm a Microsoft Security MVP for 2005 - 2006 and I have a lot of respect for the folks I know there on the Windows Defender malware research team. I'm also a contract spyware researcher for Sunbelt Software. I use a firewalled router, Agnitum's Outpost Pro firewall (I've never used the XP firewall), and I run Kaspersky Anti-Virus on my home machines. I don't use real time spyware protection and don't get infected unless I'm in a virtual machine trolling for spyware.
Update June 21: Alex Eckelberry's blog about Microsoft's predatory pricing has stirred the pot on both sides of the fence. Larry Seltzer disagrees with Eckelberry and makes the points that the cost of security services is too high and Microsoft's entry into the game will bring down the prices to a more affordable level. He also says, and I agree with this to a point, that too many computers are completely unprotected and Microsoft's OneCare will make it easier for more people to secure their machines. Seltzer mentions the free anti-virus AVG but neglects to mention Avast and AntiVir, two other free programs. I scan a lot of newly discovered malware files at Jotti and VirusTotal and typically those companies are not among the first to have definitions. Since there are free AV programs, there's really no excuse for users not to have an AV program, so in that sense I wonder how many people that currently don't have an AV will use OneCare. But on the other hand, since it is from Microsoft, more people will likely become aware of it.
Seltzer writes:
Similarly, even if OneCare is weak in some areas of coverage, I can see it being a good solution for lots of people who feel abused by the big anti-virus companies making them pay $40 per year per computer.
No one should feel "abused" by the big AV companies because there are free alternatives. Sometimes, too, it's a matter of quality -- getting what you pay for. My personal favorite, Kaspersky Anti-virus, is among the higher priced apps, but I don't mind paying a little more for what I consider to be the highest quality product. KAV is often the first to have definitions of new malware and puts out hourly updates. And, no, I don't work for them or sell their products.
Ryan Naraine's article here asks if Microsoft's pricing is predatory or correctional and quotes statements from others in the industry.
David Moll, CEO of privately held anti-spyware vendor Webroot Software, threw his weight behind Eckelberry's concerns, arguing that Microsoft's pricing policy is "consistently out of line with the rest of the industry."
Moll also brought up potential legal issues in Europe and here with Microsoft's entry into the security market. Others disagreed with Eckelberry, including John Pescatore of Gartner, saying that Eckelberry's analysis and conclusions are incorrect, citing rebate programs and special offers from other companies. A Microsoft spokesperson stated "its entry into the market is driven by the fact that a segment of its customers remain unprotected."
A representative of Kaspersky says his company isn't worried because they target a different segment of the market.
"We're going after an educated, technical consumer. We will compete at the technological level and let the others fight over pricing," Orenberg said.
"Microsoft's moves really don't bother us. Someone who's buying OneCare is probably not going to buy Kaspersky. They'll take market share away from Symantec and McAfee. We've decided to play in a different space," he added.
I expect he is correct that someone buying OneCare isn't likely going to buy Kaspersky and I think the reverse is true as well. I may have more on this later. Keep in mind, I'm no expert on enterprise security applications or the enterprise security market and am looking at this more from the perspective of the home user.
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Talkback
Interesting.
I for one am quickly loosing confidence in not only our economy, but my country as well. I'm hearing of too many suits where the bad guys are winning.
Cheers
Take an objective look at your motivation Suzi.
Let's face it. The industry you speak of is far more about money than consumers net security and safety, and thus the sheer overwhelming volume of unnecessary and pricy software available, continues to expand by the hour. Surely protection is necessary, but your industry, is clearly in an all out feeding frenzy.
What is your problem with Microsoft's pricing then really?
You wrote. "Sunbelt BLOG compares the numbers, pricing for the Microsoft products to comparable products from Symantec, Trend Micro and McAfee, showing how Microsoft is undercutting their prices by as much as 44% for One Care and as much as 63% for Antigen."
This really boils down to a potential loss of revenue -$$$- , for those who compete with Microsoft in creating software, to increase the security of 'Microsoft's own product'! Would you complain if SUNBELT, which you work for, undercut the pricing of competitors software created to shore up their software, if an industry sprung around that? Now please don't change the subject, with something like, but no one does or will ever need to etc.
You wrote. "Disclosures: I'm a Microsoft Security MVP for 2005 - 2006 and I have a lot of respect for the folks I know there on the Windows Defender malware research team. I'm also a contract spyware researcher for Sunbelt Software. I use a firewalled router, Agnitum's Outpost Pro firewall (I've never used the XP firewall), and I run Kaspersky Anti-Virus on my home machines. I don't use real time spyware protection and don't get infected unless I'm in a virtual machine trolling for spyware."
Do you think that as long as you do not personally use SUNBELT's firewall or antispyware software, that we assume you to be free of bias or somehow immune to issues of conflict of interest. Or really that is, in your case, I should say interests.
Do you think I wonder why you not only refused, loudly openly and publicly on your Spyware Warrior forum, to support the call by consumers for public download sites like ZDNET/DOWNLOAD.COM to clean up their act? Or do you think that we were surprised, when you took "proactive steps" to undermine my attempt on download.com to do the same? All anyone would have to do, is go to your Spyware Warrior forum and read my posts as Channi, and then your responses to them, to know what I speak of.
Decreased spyware/adware distribution would mean less demand for your industry's products, and that would mean your industry would be less lucrative. It would appear, that even so much as decreasing the proliferation of spyware and adware, is not really your core concern at the very least. So therefore a conflict of interest already exists. At least from the perspective of the millions of end users. That white horse of yours seems a bit less shiny white and high each day.
Conflict of Interest
It appears to me to be a receipe for extortion if MS kills the third party vendors as you know it intends to do. "Buy our software - Now buy more of our software to make our software safer..." It's the most ridiculous thing but people will probably be stupid enough to fall for that.
The correct thing for MS to do is to eliminate the market for these products, not to capitalize on them. That includes making the public download troughs clean as well as eliminating or closing all of the MS TCP/IP ports and messaging protocols that are open for MS products to communicate with the mothership and their Back Office/Small Business server products.
Don't get me wrong, ...
I am not defending Microsoft. They could have created a completely new and safe OS with the advent of the Pentium processor, and for whatever reason, likely "economic", they chose not to. At this time what ruffles my feathers are disingenuous complaints coming from the profit driven ASW industry. I just hate seeing people living in glass houses throwing stones.
Well....
priceless, ....
funny. why not go all the way
but is this a great sin? is it disempowering or empowering? does everyone have to acquire computer expertise on top of the other expertise they have (researcher, business person, government specialist, etc), in order to qualify to use such a potent tool? education is great, but at some point we need individuals to specialize so that they/we can contribute to efforts greater than single individuals can achieve. further, making money move through the levels of our economy, however painfully it sometimes becomes, is vital to our common and mutual economy. pares the morality the wrong way and things grind to a halt; however just it may seem, it's not really a desireable outcome.
Webgrrrl can snipe at Suzi, and Suzi at Webgrrrl, about the nuances of whose righteousness encapsulates the other's, but in the end spy/adware, anti-spy/adware, crummy OS, and fancy interfaces put food into peoples mouths. it may be a grotesque dance, but the tune's been called generations ago, and now our population is just too big for us to call another on on the turn of a sentiment.
I think both have some valid observations and suggestions, but for either to expect to claim some absolute of moral or rational ascendancy on this particular sub-topic is faintly ridiculous. chill, yo.
dkloke
Please see my last post, just before this one, titled 'The broader implications also go unnoticed.'
Why's everybody pickin on ms
In a few months you'll be able to show your gratitude by making a $1,000 contribution to the God Gates. For that offering you'll be able to debug two of the safest and user freindly software ever.
;)
So what should MS do?
If MS 'fixes' all security holes in Windows, thereby effectively achieving the exact same ernd result (driving all security competitors out of business), would you complain then?
Just what should MS do at this point? Should it only be allowed to charge the same as its competitors do?
Carl Rapson
:)
Re:So what should MS do?
In truth? I think the shock and surprise alone would likely kill me.
But, wouldn't you say that in any other industry that a basic degree of safety is required?
Can you imagine if autos where shipped with window glass instead of safety glass, and places that optional bumpers and turnsignals could be mounted, but you where expected to supply on your own?
I think it's called a "Protection Racket."
It burns me to pay three hundred US for an operating system, then over the next seven years spend five times that on products to fix it's shortcomings. Don't even let me get started on what the bonehead glitches during the first year we where, as we paid to be the beta testers for XP, after it's commercial release.
But now I have to consider the MS entry into the security market to be sinister and predatory, instead of thinking of Microsoft as "just" incompetent.
The boys in Redmond have long looked at all that money that was being made on software that they where not getting, and their palms itched for long enough they have made their move.
I suppose they could put every vendor of security software out of business by say. . . writing a secure OS, but the public will accept less, and that is what they have always delivered
Now, they will build to the same standard, likely ship the same third rate product, sold with the same first tier advertising campaign, then hold a gun to the consumers head demanding a "subscription" (protection money) to keep da boyz from coming in and trashing everything. There won't be any other game in town, since they will have all been "protected" out of business.
Is there a limit to the contempt Microsoft shows to it's customer base? So far, it seems there is no insult the end user won't endure for the privilege of owning a Microsoft product. The Delhi help center seems to show that clearly. So since bend over boys, here comes Customer Care, the Microsoft way!
greed or good business
it seams a while ago when windows was talking about encorporating the antivise,spyware blocker,the whole lot,in their new sys. somthing happend, i think two light bulbs lit at once.#1.if the put it all in the sys. the could drive all the private co. out of businesses and not make a penny but have to bare the price of maintaning it.#2 some one realised that the antivris market was a multi million dollar buss.as they did'nt aready have enough sheckels in their coffer they could offerd there antivis at a cut rate price and after driving all the small guys out off buss. they could double their price.
this is just a thought.but seriously if ms was a real customer related co. it would put the software in the new sys.and could it updated with their regular updates.and all the non computer savy people,like me, could rest a little better.and not have to spend so much time on these talk back centers.keep up the great forms.
OneCare and the lesson leared from IE
So did MS create a stand alone browser? No, they built one INTO the OS and after they had driven the competition out of business, had a few bottles of hooch and went to sleep off the drunk.
Cept when they woke up, they found they had built a great screen door, for the Windows submarine.
Rip out the screen door and replace it with a real steel door? Why bother, they didn't have any competition any more. And it's been so long suckers, ever since.
That MS can't develop a browser that would squash Firefox et al like a bug, tells me everything I need to know about One Care.
Oh please, I want to buy my security software from a company that created the problem in the first place, then sat on their hands for a decade.
A lot of people don't seem to see the long term result
Reduced pricing is normally an acceptable strategy for entry into a market: it allows the vendor to overcome the entry difficulties of unknown products. However, after establishing a foothold, the vendor then adjusts their prices upwards because they have to: they've run out of cash. They then compete on value.
When Microsoft does this, the situation is different: its strategy can reasonably be called predatory. In the first place, MS has access to the two cash cows of the Windows and Office near-monopolies, so it can offer prices aimed at gutting the competition, and it can keep going until the competition all disappears. Secondly, history shows clearly that this is Microsoft's strategy (look at the competition for the server market, other than open-source, and for each Office product).
Microsoft's claim that prices are too high? Hmm, let me see. Here's an industry that has to do constant research and issue updates every week; there are several major vendors, including open-source products; these key products sell for less than $50 per year...I'm a customer and I don't think so.
Bottom line, we the consumers get screwed. We lose the choice of the many options in a free market; we start paying too much for a so-so product that rarely gets updated. Nobody cares if Microsoft offers A product, then they have to compete on value. We are concerned about Microsoft's goal, to make sure we don't get any other choices.
The broader implications also go unnoticed.
Variety may very well be the spice of life. Yet I am overwhelmed sometimes just by trying to choose a toothpaste. I find it galling when all of my potential "choices" contain both sugar and fluoride also.
I tried the free and open source LINUX, and I soon found I could not afford it. I went MAC also for a while, and while less the electrified consternation than Microsoft's OS, a bitter proprietary rivalry made for an incomplete and limited platform which could not meet my needs.
We may persist, along with everyone else, to focus on "all those other bad people" we should loath and fear. Yet by so doing we are not the free and brave, but mere cattle, as we are duped by the promoters of cognitive dissonance to serve their ends.
Through the induction of cognitive dissonance on a mass scale, by many means, the planetary meme has been shaped to accept a brave new world. Self delusion narcissism cowardice and apathy are requisite, as our attention and self serving bias is diverted toward that which concerns our personal bubble, over that which affects us all collectively.
Repost your post with synonyms
Variety may very well be the spice of life. Yet I am overwhelmed sometimes just by trying to choose a toothpaste. I find it annoying when all of my possible "choices" contain both sugar and fluoride also.
I tried the free and open source LINUX, and I soon found I could not afford it. I went MAC also for a while, and while less the shocking dismay than Microsoft's OS, a bitter proprietary rivalry made for an incomplete and limited platform which could not meet my needs.
We may carry on, along with everyone else, to focus on "all those other bad people" we should oppose and fear. Yet by so doing we are not the free and brave, but mere sheep, as we are duped by the promoters of factual knowledge conflict to serve their ends.
Through the introduction of factual knowledge conflict on a large scale, by many means, the earthly idea (behavior or style) has been shaped to accept a brave new world. Self image self-importance cowardice and laziness are required, as our attention and self serving favoritism is sidetracked toward that which concerns our personal space, over that which affects us all communally.
Back to Worthwhile Internet Security
It goes beyond the scope of this discussion to explain the breaches in Windows or even the users shortcomings.
What is germane is that Norton and McAffee change $30+ for baseline AV software and $60+ the full Internet Suite...and they don't catch the malicious software. Furthermore, these products bog down most PCs.
So, Microsoft will eventually secure its operating systems and offer its new integrated products at a fairly comparable price. What is predatory about that?
Is anyone going to miss Norton or McAfee?
(This message is being brought to you by Vista Beta 2. I feel very secure.)
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