Microsoft steps on Security Firms toes with free MSE offer!

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Microsoft steps on Security Firms toes with free MSE offer!
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Jim Hillier
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November 11, 2010 - 8:40 pm
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It appears both the Trend Micro and Panda security companies have got their collective noses out of joint by Microsoft making its free Security Essentials software available to customers through their Microsoft Update service as an optional download. The updates started appearing on November 1st for U.S. customers and October 19th for U.K. customers. However, Microsoft are offering the download [i:38ged07m][b:38ged07m]only[/b:38ged07m] to customers who do not already have any anti-virus installation that can be detected by the Action Center[/i:38ged07m].

Both companies are claiming Microsoft is employing "unfair competition" by leveraging off its update service to offer their own MSE anti-virus solution to the millions of Windows users.

Sounds like sour grapes to me. Apparently both Panda and Trend Micro are contemplating civil action.

Seems to me there is nothing wrong with offering a free security solution on a purely voluntary basis and only to those who do not have such protection already installed on their computers.

In fact, that sounds very much like a common sense approach to me. Who can argue with a company offering people a free download of security software if they want it? Panda and Trend Micro can, that's who!

Perhaps these security companies should invest more time looking into ways they can decrease the often exorbitant prices for their own products. Maybe reducing the cost of their subscriptions would be a more constructive and proactive method of gaining a competitive edge in the market place than continually moaning about what Microsoft is doing.

What do you think?

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Flying Dutchman
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November 12, 2010 - 5:51 pm
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Hi Jim,
You do manage to introduce subjects that kindle my interest.

First off, this is offered as an opt-in through MS updates to users with no AV installed. Does Trend Micro, Panda or anyone else think that the majority of people that go out on the Internet with no AV would actually go shopping (look around, compare, try out, decide, pay, use) for one?

Now, lets see:
Carpenter of Trend Micro to Infoworld:
[quote:1oitsswk]What concerns us is a vendor using market leverage to drive its solution in some unfair way.[/quote:1oitsswk]
I wonder why none of these AV vendors regard the practices of Symantec, McAfee and others to pay computer makers (brand named or not) to bundle their products with their computers as "market leverage". It's been going on for endless years and not out of the kindness of the vendors' hearts, the goal is to get a paid subscription when the extended trial's up.

Carpenter of Trend Micro to Infoworld:
[quote:1oitsswk]We've competed against free for a long time. We've not seen [free products have] much impact on our market share.[/quote:1oitsswk]
[url=http://www.oesisok.com/news-resources/reports/worldwide-antivirus-market-share-report%202010:1oitsswk]Here're[/url:1oitsswk] some news for Trend Micro and everyone else. It's a world wide market share report released in June this year by OESIS OK. While reading through the report, take a good look at the graphs and keep in mind (emphasis added by me):
[quote:1oitsswk]Although the true market share of security applications often remains hidden, software vendors will [b:1oitsswk]claim[/b:1oitsswk] to dominate a market [u:1oitsswk]based on their sales numbers vs. the reported sales numbers of their competitors[/u:1oitsswk]. However, as a unique alternative, we are able to present the following report [u:1oitsswk]based purely[/u:1oitsswk] on the detection of the applications that tens of thousands of [b:1oitsswk]users actually have installed[/b:1oitsswk] on their endpoints.[/quote:1oitsswk]

Luis Corrons on Pandalabs blog (emphasis not added by me):
[quote:1oitsswk]we encourage Microsoft to continue using Windows/Microsoft Update [b:1oitsswk]but instead to push all free antivirus products available on the market, [u:1oitsswk]not just MSE[/u:1oitsswk][/b:1oitsswk][/quote:1oitsswk]
Why does this smell like another "war of the browsers"? Which is the wrong way to go, IMHO (as it was with the browsers; IE should have been opt-in as MSE is right now).
I wonder if Panda would have the same stand if they didn't offer a free product.

MSE has been bashed a lot, mostly by the big and traditional AV vendors. If you take a look at the latest (Aug. 2010/revised Oct. 5th) [url=http://www.av-comparatives.org/comparativesreviews/main-tests:1oitsswk]AV-Comparatives main tests[/url:1oitsswk], MSE didn't do that badly; in fact, it did quite better than Trend Micro and not that much worse than Panda and Symantec (which are not exactly at the top).
It's been highlighted that MSE didn't get an [url=http://www.av-test.org/certifications.php:1oitsswk]AV-Test certificate[/url:1oitsswk] during the 2010/Q3 tests (done on Win XP), but during the 2010/Q2 tests (performed on Win 7) Trend Micro failed and it's a vendor much longer around.

I never heard a single word of complain about MS Defender or MRT being offered through MS/ Win updates. The big fuss with MSE shows that it has potential and that leads to unease and fear.
I don't have MSE installed and I'm not thinking of doing so any time soon. And this is not a defense-post for MS. But I think ars technica sums it up quite nicely:
[quote:1oitsswk]The third-party software vendors are more than happy to insist that Windows needs antivirus software and that using a Windows machine without such software is dangerous

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Jim Hillier
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November 12, 2010 - 8:50 pm
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[quote:2sgmvv6i]Here're some news for Trend Micro and everyone else[/quote:2sgmvv6i]
Very interesting information FD. Never come across anything like it before....thanks for the link.

[quote:2sgmvv6i]I wonder why none of these AV vendors regard the practices of Symantec, McAfee and others to pay computer makers (brand named or not) to bundle their products with their computers as "market leverage". It's been going on for endless years and not out of the kindness of the vendors' hearts, the goal is to get a paid subscription when the extended trial's up.[/quote:2sgmvv6i]
An excellent analogy FD and so true!! Wish I had thought of it!!

Cheers....Jim

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Flying Dutchman
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November 19, 2010 - 5:39 pm
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An article over at the Windows Blog instantly brought this thread to mind.

If you bare with me, it'll be clear why it did - at least I hope so.
Symantec was among the security vendors bushing MSE.
They told ars technica that Microsoft's approach is poor:
[quote:3is71s96]While we applaud any vendor that heightens small business awareness around the need for computer security, it's clear that today's threats have moved beyond the capabilities of the product Microsoft is offering.[/quote:3is71s96]
And to ZDNet:
[quote:3is71s96]It

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David Hartsock
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November 20, 2010 - 9:26 am
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I'll throw my 2 cents into the ring...

Security research is very expensive!

The security of Windows falls on Microsoft, plain and simple. Unfortunately, for us, in the early days of windows development the computer world was a much more "friendly" place. Connected computers were rare, no one envisioned that people would write software to do harm, and the community was place of excited enthusiasm. No one envisioned the situations that are possible today and software wasn't written to counter them. As they became public they were patched, but not much effort went into prevention. Who's to blame? Microsoft? Probably, but think of the computer mentality during the early 90's.

As time progressed, and security became more of a concern, Microsoft was in a learning curve as were end users and the software industry as a whole. Microsoft was between a rock and a hard place, but they have made steady security progress with each new OS. Methods to detect vulnerabilities before the software is released have gotten much better also.

Now, back to my original statement... Security research is expensive!
Microsoft spends millions (billions?) of dollars to make a secure OS. They have researchers working at each stage of development to find holes and vulnerabilities. They are at a disadvantage as the number of researchers is limited as is the amount of time they can devote. When the software goes to beta there are thousands of people, both good and bad, who start looking for vulnerabilities. When the software goes Gold and is released to the public that number goes into the millions - everyone from script kiddies looking to impress their friends to "Groups" who intend to use anything they find to spread malware from profit.

Now let's look at the AV industry. They employ some incredibly intelligent researches who have to reverse engineer everything they find. They also deploy some serious hardware to "catch" new threats. All of this costs lots of money.

The problem is that to be effective an AV company has to get money from somewhere. Eset earns its' money from selling AV software. Norton earns its' money from selling AV software. BitDefender earns it's money from selling AV software. Avast gets it's money by selling AV software. Avira earns its' money by selling AV software. If we look at a totally free AV, like ClamAV, we can see that it doesn't even compare to the for-profit companies. Some may disagree, but I won't put it on anything I am responsible for.

Now, look at MSE. MSE makes no money. MSE pays none of its' own bills. MSE's success (in the grand scheme of things) isn't tied to income. MSE has an unlimited budget. How is it fair that they compete with a company who's ultimate success depends on the quality of their product - your product sucks you don't sell as many, you don't make enough to pay the bills, and you go out of business. If MSE goes downhill they don't have to worry about this. Microsoft will just throw more money at it.

I know someone will jump in and say, "But wait. Avast is free. Avira is free.", but they aren't! Avast, Avira, AVG [b:2xp7fstt]ONLY[/b:2xp7fstt] provide a free software in an attempt to sell their paid versions. If no one bought the paid versions there would be no free versions. There is no free lunch in the AV world. I personally see the companies who issue free versions as a bad thing. It alters the public's perception concerning the value of AV software, and as I've stated there is no free lunch.

The point of my incoherent rant is that MSE is in an unfair position to compete with the other AV products and even more so if it is included in the update process. Some will say that there wouldn't be a virus problem if MS hadn't created in the first place, but this is short sighted. What about all those people who get infected? Well, you don't buy a car until you know how to drive. More people need to learn safe computing practices, learn about computer security, practice safe computing, and learn that there is a value to AV software.

In a perfect world Windows, and all other software (I'm looking at you Adobe and Sun), would be completely secure and there would be no need for AV software, but this is not the case. A better solution would be for the AV companies to charge a more reasonable fee for their software. $60 per year? A little much. $20 per year? Much better!

** I'm not bashing MSE - It's a great product at the moment and fills a much needed void until perceptions change. It's more a case of AV companies shooting themselves in the foot by pricing the products so high, free AV software altering perceived value, and Microsoft being in a position to market a product through Automatic Updates.

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Jim Hillier
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November 21, 2010 - 3:13 pm
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A cogent and compelling 2 cents worth it is too. Can't argue with the logic mate.

My main beef is that whining about "unfair competition", be it true or false, is not going to help these companies generate more sales or increase profits (admittedly a follow up law suit might have the potential to help the bank balance a tad). Will Microsoft's tactics detract from the security companies bottom lines? I seriously doubt it. After all, MS are targeting only those users who do not already have an AV product in place. My guess would be that if those people have not yet bothered to install any freeware AV, the chances of them actually purchasing a commercial AV would be near enough to zero.

I have no doubt that producing effective AV software would be an extremely costly affair but, in my experience, internal fiscal policies would be more likely to dictate profit fluctuations than any external influences such as the one (allegedly) currently being exerted by MS. Profits can be increased in three basic ways:
1) Increase prices (and consequently gross profit margin)
2) Decrease overheads (cost cutting)
3) Increase turnover (improve sales)

Unfortunately, the majority of businesses will generally opt for price increases as the number one solution....yes, that option was not placed at the top of the list by chance. Cutting overheads is just too big a chore and after careful consideration will generally get tossed into the too hard basket. The possibility of increasing turnover will also be discussed at great length but then spurned as being, ultimately, too costly and time consuming. What we need is a quick fix and increasing prices offers the prospect of an easy way out with almost instantaneous effect. The problem is that, in reality, increasing prices does not necessary mean increasing profits, in many cases it can actually have the adverse effect. The all important and often disregarded element here is turnover (or volume).

This is where a lot of businesses err; first response to flagging profits = increase prices. Oh dear!! The real solution is actually not that complicated nor too diffcult; cut unnecessary overheads, drop prices and increase sales. You don't need to be a Rhodes scholar to do the math, yet, seemingly, that common sense approach is not so obvious to the 'wizards' who are often paid mega bucks to oversee these operations.

An example: I was once involved with a very large licensed sporting club. They weren't traveling too well financially and asked me to come in and poke around. The very first place I headed for was the bar prices. I noticed they were charging $6.80 for packaged mixed drinks sold individually across the bar. A quick look at the inventory revealed the same items incurred a base cost of around $1.75 each.....a healthy profit margin and huge markup (around 275%). I asked the Secretary Manager how many cartons (x 24) they sold each month, he replied they averaged around 16 cartons per month. I told him to drop the price to $4.00 per unit (still a markup of just over 100%) and report back to me in 2 months time. Two months later and the sales of packaged mixed drinks had increased dramatically to over 50 cartons per month. We had more than halved the markup percentage yet increased profits for that one item by almost 44%, in just two months! Needless to say, the lesson was not lost on the Secretary Manager and my job was already half done.

So I'll finally get to the point of this long dissertation; the security companies have for far too long concentrated on what they thought the consumers needed instead of what the vast majority of consumers actually want: good, strong basic security at an affordable price. **Not the expensive, bloated, resource hungry products we have come to expect.** The path to better sales and increased profits is in their own hands; It ain't rocket science and a shrewdly constructed positive approach would be far more beneficial than whining about what MS are up to.

**I'll note the Eset company as a possible exception to the rule.

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