ESET Restores Big Margins To Antivirus Tools

In the fast-moving security space, it usually doesn't take too long for new technologies to evolve from high-margin moneymakers to low-margin commodities as new or bundled solutions move in to take their place. But a relatively unknown security vendor, ESET, is building its business and attracting a growing number of channel partners by delivering unusually high margins on a technology that many people assumed had been commoditized for good.

For this reason the company is rebranding its NOD32 Antivirus System as an antithreat system, as it attempts to add to the 600 or so resellers already in the fold. Regardless of what they're calling it, one of NOD32's biggest selling points to VARs is that it gives them much better margins -- and in some cases, much better performance -- than similar solutions from better-known vendors.

"Our message is that you can still make money selling antivirus software; we have a 30 percent margin floor for everyone, plus quarterly incentives such as volume-based rebates," says ESET CTO Andrew Lee. "We're a smaller player, but we have fewer VARs contending for every opportunity, and half our business comes from Symantec customers who feel they've been gouged or aren't getting the protection they should for the price they paid."

ESET boasts that when virus or worm outbreaks do occur, their customers get protective updates that are consistently three to six hours ahead of what ESET's competitors provide. NOD32 includes protection against other threats, such as spyware, and features remote management functions as well. ESET plans to continue adding features but is leery of creating a solution that's too cumbersome to manage.

"We may start to include technology that deals with new threats as they come in, but everything is geared toward making this the leanest, most efficient solution possible," Lee says. "We don't want to have a bunch of stuff thrown together in a Frankenstein manner; people already are getting bloated product suites from other vendors that don't actually give them any better protection than ours does."

ESET's partners say the combination of great margins, plus outstanding performance, makes the company doubly attractive to partner with.

"We usually get 8 to 10 margin points on antivirus tools, but with ESET it's 30 right off the top," says Steve Elek, president of CSA, a networking and security consultant in South Bend, Ind. "We've used bigger-name products but always had issues with installing them and keeping them up and running."

Elek says he was sold on ESET's tools after first seeing them in action about five years ago.

"We were running a beta of ESET on one of our workstations when the NIMBA worm came out," he says. "Of the 1,200 computers we had at the time, the one running ESET was the only one that wasn't infected, and that was version one."