Microsoft Joins Free Security Software Push

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Most of today's home computer ailments don't come from e-mail; they're contracted by users who visit malicious Web sites or download files from them. On Dec. 4 reports surfaced of a virus on social networking site Facebook that tries to trick users into downloading malicious code. Free security software products "don't really address today's threats," says Todd Gebhart, an executive vice-president at McAfee.

John Pescatore, an analyst at market research company Gartner, says Morro and other free products may be adequate for some consumers, but don't provide comprehensive protection. "The threats have moved way beyond what antivirus software can provide," he says.

For a reasonable annual fee, security software vendors argue, consumers can get everything they need to stay safe online, including defenses against spyware, phishing attacks, and malicious Web sites, plus controls for parents over where their kids surf. "Customers are pretty smart about free," says Janice Chaffin , group president of Symantec's consumer business, which includes its popular Norton line. "Why would you take something free that's less protection than you need?"

Rising competition, falling prices

Symantec, McAfee, and Trend Micro garner much of their business from loading trial versions of their programs on new PCs from Hewlett-Packard (HPQ), Dell (DELL), and others. AVG, Comodo, and some other vendors give away basic antivirus capabilities, then try to sell users on buying paid versions with greater capabilities.

The big security publishers are responding to user complaints by taking steps to make their software less taxing on a machine's power (BusinessWeek.com, 8/7/08). But the rise of free security software presents a troubling trend just when security software prices are falling—including discounts of 20%, 30%, or more since Thanksgiving. "Everything seems to be on sale," says Carol Carpenter, a vice-president at Trend Micro.

Now, the small vendors themselves are threatened by Microsoft's plans for Morro. "You have the giant in the room coming in and giving it away for free," says AVG spokeswoman Siobhan MacDermott.

Morro: fewer features than OneCare

The idea behind Morro is to batten down Windows by getting more PC users to deploy antivirus and antispyware software, thereby stemming the tide of attacks that mar Microsoft's brand. OneCare never gained much market share; sales represented less than 1% of the home PC antivirus software market in 2007, according to Gartner. "It was a market Microsoft didn't understand very well," says analyst Pescatore.

Morro will have fewer capabilities than OneCare, which included software to back up files and perform PC maintenance. But it's also being designed to run smoothly on the stripped-down and increasingly popular laptop machines (BusinessWeek.com, 11/18/08) known as netbooks, as well as less capable PCs sold in emerging markets. Microsoft hopes in part to blunt Apple's (AAPL) argument that consumers should switch from PCs to Macs to avoid viruses, says Endpoint's Kay.

For consumers, the decision to stop paying for security software and download a free product may depend on their tolerance for risk. The freebies suit more sophisticated users—often above the age of 30—with conservative Web-surfing habits, says Chris Christiansen, an analyst at market researcher IDC (IDC). "They're not going to weird places; they're not downloading weird crap," he says. "They're paranoid." For PC users of all stripes, fear may be the best defense of all.

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Ricadela is a writer for BusinessWeek in Silicon Valley.