Microsoft, Symantec To Slug it Out
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Microsoft and Symantec are squaring up for a major battle between OneCare and Genesis.

In what will no doubt turn out to be one of the big battles over the next couple of years, Microsoft is poised to enter the security business with a commercial offering for the home and SMB solution that strikes at the very heart of key revenue streams cultivated by incumbent security companies such as Symantec, Trend Micro and McAfee.

Microsoft’s entry into the security space has been slowly gathering momentum, but with the Beta2 Release this week of its new Software as a Service security and maintenance offering Microsoft nears its initial onslaught on the security business.

Windows OneCare Live, due for launch (at least in the US) this June will position Microsoft squarely in competition with software companies which have in the past been close allies and partners. Ultimately, Microsoft will offer similar SaaS solutions for the enterprise placing further pressure on key revenue generating products in the Symantec portfolio.

We can expect the incumbents to fight back. Symantec announced it too would take on Microsoft in this new product arena with a similar security and maintenance offering called Genesis.

No matter what happens though, SmartOffice News predicts this significant change in the security and tools landscape spells more trouble for struggling resellers and retailers as another product range falls off the shelf with the revenues going direct to the vendor.

Though targeted at inexperienced Home Users, OneCare is a direct attack on the SMB and consumer revenues incumbent security firms rely heavily on. The US$49.95 per year charge compares favourably to the charges maintained by specialist security companies unless they stick with last year’s outdated release and opt for the purchase of a signature updates subscription.

Furthermore, in contrast to the licensing requirements of the other vendors which require one retail pack per PC (Trend Micro moved to reduce its licensing with the 2006 Internet Security edition to reduce the number of PCs covered from three to one), Microsoft has announced that OneCare will cover three PCs for the one subscription price.

Though Microsoft won’t formally release OneCare as a subscription product until June this year (to the US market at best), thanks to the ongoing Beta program of nearly 200,000 users, we are already starting to get some independent feedback on how the service might perform.

One of the key selling points Microsoft will have for OneCare is the no fuss approach it takes to security and maintenance. Most home users understand little about their PCs and even less about maintaining performance and security on the system, so even where correct tools are purchased, it is questionable how well they are used.

Checking configuration settings and scheduling PC-maintenance tasks, with a watching brief on Windows OS updates, OneCare will also ensure the user runs regular file backups and offer a range of security focused tools in the OneCare Protection Center.

During installation, one of the tasks done is to switch off the feature crippled Windows XP SP2 firewall and replace it with a more capable two way firewall. Similarly any competing Antivirus product is disabled to be replaced with OneCare Antivirus. One part of the Protection Center is Microsoft’s antispyware product Defender. According to reports the company plans to offer Defender as part of the new Vista operating systems and will also offer it free for older Windows versions. The service also offers free phone, e-mail, or live chat support.

 

Many of these features are key motivators for existing shrinkwrap sales of competing products. Although Symantec’s reliance on consumer retail sales has reduced in the past 12 months and with the addition of Veritas, is becoming a less important part of the business, Symantec is clearly the company best positioned to take on Microsoft’s OneCare. Unlike other security company’s, Symantec has a full arsenal of PC maintenance tools form the Norton SystemWorks range.

Careful bundling its security services into one retail pack and its utilities in another has proved an excellent way for Symantec to extract money from the consumer market, but this cash cow is most certainly in danger as a result of the Microsoft moves.

In response Symantec has already announced a competitive subscription service which will launch in September this year. Like OneCare, Symantec’s Genesis, will integrate security tools along with PC tuning and backup services to be delivered as an online on subscription. For the first time Genesis will see Symantec’s security, back-up and maintenance tools all integrated under the one interface.

Although product details are clearly not yet finalised, Genesis will also offer 1GB of online backup for critical files and in a long overdue move will introduce free live chat, email and phone support. The company has often been criticised for its woeful support mechanisms and the move to address this issue alone may make it a more palatable solution for the low-end of the market.

Genesis will offer a broader range of security applications than OneCare, including antivirus, antispam, antispyware, intrusion prevention, a more sophisticated firewall as well as the PC optimisation and maintenance utilities. Another add-on will be an as-yet-unnamed set of transaction security tools acquired by the company through the Veritas acquisition. These tools are said to offer similar phishing protection to those found in the Internet Explorer 7 Beta, but with more sophisticated defences says the company. These features will also be rolled out with the next edition of Norton Internet Security later this year (as will the long overdue defence against Keyloggers).

The Symantec solution looks likely to be more comprehensive than OneCare’s initially launch subscription, however, no pricing has announced for Symantec’s offering so it’s not possible to make a reasonable comparison between the two. Either way, any widespread adoption of either service will severely impact on shrinkwrap sales, shifting revenue away from retailers and resellers to company direct sales.

 

Despite plans to maintain its standalone products, Symantec will have difficulty differentiating the two and potentially even more difficulty convincing home and home office users to pay for two product bundles – utilities and security.

In the very least it would mean that Symantec would now have to offer more than just signature definition updates as part of its subscription on the retail packages. Again, the inclusion of application updates will have a flow on effect of reducing annual sales of shrinkwrap software. Symantec has already moved to do this including code updates to the antivirus scanning engine through LiveUpdate during the December period. Whether this was due to critical problems with the code or the start of a new direction in subscription services remains to be seen.

Microsoft will no doubt make code updates and possibly new applications a feature of the annual subscription service to help justify the higher annual fee, in order to compete, Symantec will be forced to follow suit.

The big challenge for both subscription services will be a channel to market. Though in the past Microsoft has been able to introduce products to market by bundling them with the operating system, this has bought the company major legal headaches in the antitrust area and the company will have to be very careful how it positions offerings like OneCare Live and Office Live in the new release of Windows Vista. A key difference here also, is that OneCare is not a free product in the way Internet Explorer or Windows Media Player were freely bundled with the OS.

This may well be enough to appease the antitrust watchdogs. There is a precedent. The current install of Windows already offers to help the user sign up for Internet access, offering the OneCare maintenance as a an optional subscription may not be seen in the same light as free bundling was.

The US department of Justice has already been asked to investigate claims about alleged antitrust breaches in Microsoft’s Vista plans, but so far has given very little detail about this investigation.

For its part, without access to built in prompts, Symantec may well rely on Web partnering. The company already offers an antivirus solution in the free application bundle Google Pack and this model could be expanded to other content producers, toolbars and Website’s.

Another aspect to consider in Microsoft’s eagerness to ensure comprehensive threat mitigation on personal computers is the ongoing burden it carries to provide security patches and hot-fixes to the operating systems.

While it has copped a fair amount of flack for running a ‘Protection racket’ because it provides an inherently insecure operating system and now plans to offer the means to alleviate the risk as an add-on service, Microsoft is unlikely to ever develop an operating system that will be invulnerable to attack and exploit. One has to wonder whether widespread adoption of heuristic and universal threat mitigation tools will help reduce the expensive and onerous task it now has of providing regular security updates and hot-fixes for the operating systems.

Microsoft would probably gladly swap complex changes to the interdependent components of the operating system for a process of relatively simple definition and signature updates. In the long run, save for the antitrust problems Microsoft would probably be happy to give away an entire security suite to every Windows user.