Microsoft's Morro Incites Mixed Feelings From Competition

Microsoft announced plans earlier this week to discontinue its consumer online protection service Windows OneCare and instead offer antimalware software, which would be available to users as a free download next year. The free software is designed to protect users against Trojans, spyware, viruses and other online security threats known as malware.

Carol Carpenter, vice president of the consumer business unit for Trend Micro, said that the Tokyo-based company has always competed with free security software, such as antivirus, on the market.

"There is a section of the consumer population that will always drift toward free," said Carpenter. "We've grown our business despite the many, many free offerings. There is value in multi-layer comprehensive security solutions. We know that shift to higher function suites is where the market has been going."

"I'm not worried about yet another free product," she added.

Morro will be made available to the public during the second half of 2009, in lieu of Microsoft's Windows OneCare consumer service, which will be discontinued June 30.

In actuality, OneCare presented little threat to many of the large scale security vendors, comprising not quite 2 percent of the market share. Some security companies say that Microsoft already had a lot on its plate.

"With OneCare's market share of less than 2 percent, we understand Microsoft's decision to shift attention to their core business," said Todd Gebhart, executive vice president and general manager, consumer, mobile and small business for McAfee.

Other security vendors say that Microsoft's decision to discontinue OneCare was a capitulation that the service was largely unsuccessful and unable to compete in the marketplace.

"We view this announcement as a capitulation by Microsoft, and a reinforcement of the notion that it's simply not in Microsoft's DNA to provide high-quality, frequently updated security protection," said Rowan Trollope, senior vice president of Consumer Business for Symantec, in a statement.

Trollope said that consumers "rejected" Microsoft's anti-malware service because "OneCare offered substandard protection and poor performance."

"Making a significantly scaled-back version of that same substandard security technology free won't change that equation," said Trollope.

The free software might be attractive in the long term in light of the down economy and shrinking IT budgets, security vendors say. Plus, the software is available worldwide, and Microsoft said that it would be going after emerging markets and developing countries--areas whose residents might have access to the Internet but can't necessarily afford security software.

Carpenter said that while free security software would benefit the public as a whole, there would still remain a significant portion of Trend Micro's consumer market that would still demand higher end and more comprehensive solutions.

"Having a base level of protection in their operating system is a good thing," said Carpenter, who added that what exactly Microsoft's offering meant in an uncertain economy in the long run still remained to be determined.

"What is the core and what is not? How much will they continue to invest in core antimalware products and how can vendors like Trend keep this co-opetition and add value?"

Meanwhile, despite company's assertions that Morro's release will have little to no affect on sales of more competitive products, both Symantec's and McAfee's stocks took a tumble -- 9.44 percent and 6.62 percent respectively -- following Microsoft's announcement Tuesday, ostensibly over concerns that the free service would have a negative impact on future security sales.