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Vista Poses Danger To Security Product Vendors: Analyst

Posted by iNext - 2006-04-04

Microsoft can pull the consumer security software rug out from under its long-time partners and likely avoid antitrust charges by sprinkling security throughout Vista in bits and pieces, an analyst said this week.
Microsoft's move earlier this year to debut Windows Live OneCare at $50 is a shot across the bow, JupiterResearch analyst Joe Wilcox said in an interview Thursday.

"It's clearly chosen to compete with partners," said Wilcox. "If you want one sign that Microsoft is aggressively competing with partners [in the consumer security market], look at the pricing of OneCare.

"Until April 30, anyone using OneCare can have it for $19.95 a year." Even after that, the price of $49.95 for three machines, said Wilcox, is a warning to companies like Symantec, Trend Micro, McAfee and others that Microsoft is serious about taking share.

So serious, in fact, that Wilcox expects some substantial fall-out. "Microsoft's entrance into the security product market will drive out many of the smaller vendors within 24 months," he predicted.

"The damage [to partners] will be where the competition is stiffest: firewall, anti-virus, and particularly, anti-spyware."

Microsoft's Windows Vista is already under antitrust suspicion for its plans to bundle Windows Defender, the Redmond, Wash. company's anti-spyware software. Earlier this week, the European Union sent a letter to Microsoft chief executive Steve Ballmer outlining several issues of concern.

However, Wilcox thinks that Microsoft will try to sidestep antitrust allegations by adding security scanning at several key junctures, not by bundling full-blown security packages with Vista.

"My expectation is that Microsoft will provide "discrete" scanning that doesn't protect the system as a whole, but is called on in specific circumstances.

"Microsoft insists it won't 'bundle' anti-virus with Vista," said Wilcox. "But look at Windows Live Messenger. That's a foreshadowing of things to come. When people share files [with Messenger], a scanner fires up and checks them for viruses.

"[Anti-virus] may not be pervasive, but if you sprinkle it in enough places [within Vista] there comes a point where it achieves the same function."

Microsoft's announcement in February that OneCare would be sold only as a subscription service -- and Symantec's plans to deliver a similar service this summer -- shows that the subscription model is the model for consumer security software.
"It is the model," said Wilcox, "but that model is [already part of] the problem. Used to be, you paid for security software and got free updates. Now there's an annual subscription price tag. If users don't pay it, there are no updates."

That leaves many consumers unprotected when the security software bundled with a new PC expires, and the users don't fork over more to keep updates coming. Fewer than half of single-PC households, said Wilcox, have anti-virus installed on their computers.

"The major security problem is the consumer," he said. "And Microsoft thinks it needs to solve the consumer problem."

It could have gone another route, Wilcox noted: strengthen ties to security partners, make it easier for them to connect to the inner workings of Windows Vista, or even distribute their software and/or updates through its own channels.

Instead, it took the competitive route.

"You make choices," Wilcox concluded.

And Microsoft has made its choice.

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