Will Microsofts Free Antivirus Affect the Economics of Security Giants

Recently it has been announced that Microsoft (MSFT) will release a free antivirus application that will replace the aged Microsoft live OneCare suite[1]. This application is currently code-named “Morro”, but as to a specific launch date, Microsoft sources were quiet.

For antivirus giants such as McAfee (MFE) and Symantec (SYMC), this could come as a serious threat to their markets, but it all depends on the quality of Microsoft’s antivirus. To compare, McAfee and Symantec have both been on the market for such a long time that a new free antivirus is not something to cause them much worry. AVG and Grisoft both offer their antivirus solutions in a free component for home users and their offerings have never affected the McAfee or Symantec market share.

However, Alwil and Grisoft are only just now beginning to become household names. Previous to this, the fact that these companies offered free antivirus solutions came as news to many users. With the burgeoning popularity of free antiviral solutions, however, the threat to the giants of security may just be beginning.

Provided that Microsoft does not bundle the antivirus software with the operating system, there should be no need for companies that provide end-user antivirus solutions to panic. Both McAfee and Symantec have been focusing less and less on the single-user home market and have instead been promoting products for enterprise and commercial security. It is unlikely that Microsoft’s free antivirus would be practical for companies running large back-end server systems, and indeed it may be impractical to consider running such a system when McAfee and Symantec provide such reliable end-point protection systems.

The second question that needs to be resolved is the quality and reliability of the Microsoft product. Software analysts over the years have repeatedly questioned Microsoft’s means of compiling its software and optimizing its code. As a result of their poor optimizations, many Microsoft products are buggy on launch, requiring updates and service packs to make them serviceable to the wider user community. Since the release date for the free antivirus project by Microsoft has simply been given as “soon”, one assumes they are using the extra time to focus on building the program sufficiently well to make it useable in almost any PC. One would do well to note that Microsoft produces both the operating system that the program will be run on as well as the application itself, meaning that from the get-go, compatibility may not prove to be such a major factor.

The thing that stock-watchers must be aware of is the potential of Microsoft to literally remove the home consumer market from the likes of Symantec and McAfee. What is interesting is that even though Microsoft has announced this upcoming release, McAfee and Symantec are sitting by, taking no notice of it. That would imply that they are either supremely confident of their products (which they can be), or that they do not take the Microsoft threat seriously. It all comes down to how well Microsoft implements their end user antivirus solution and if it can possibly compete with the commercially available solutions offered to date.

[1] http://www.pcworld.com/article/166487/microsoft_readies_free_antivirus_app.html?tk=rel_news