Microsoft to Discontinue OneCare, Introduce Free Consumer Anti-X Product

| Nov 20, 2008 | Enterprise Security | Competitive Intelligence Report

| Analyst: Andrew Braunberg

Current Perspective: Negative
Vendor Importance: High
Market Impact: Moderate

Event Summary

November 18, 2008 – Microsoft plans to offer a new consumer security offering focused on core anti-malware protection. Code-named "Morro," this streamlined solution will be available in H2 2009 and will provide comprehensive protection from malware including viruses, spyware, rootkits and trojans. This new solution, to be offered at no charge to consumers, will be architected for a smaller footprint that will use fewer computing resources, making it ideal for low-bandwidth scenarios or less powerful PCs.

Analytical Summary

• Current Perspective: Negative on Microsoft’s decision to abandon its OneCare consumer endpoint health product and introduce a free offering, because it feels more desperate than civic minded. Microsoft has been working for years to make a name for itself in the consumer security markets but to little avail. A free anti-X tool could obviously be a good thing for consumers, but it is not at all clear how much effort Microsoft plans to put into the all important signature updates, and how often or even how those updates would be pushed out to users.

• Vendor Importance: High to Microsoft’s consumer security business, because the company is discontinuing its flagship security offering to consumers. OneCare was the obvious platform on which to build a much more complete host-based consumer security suite. After several acquisitions and many years of product development work, Microsoft seems to be giving up on the consumer anti-X market.

• Market Impact: Moderate on the anti-X markets, because Microsoft is Microsoft. Let’s make one thing absolutely clear, however: while many will proclaim once again that Microsoft is about to kill off the likes of Symantec and McAfee, this is not just overblown, it is completely wrong. Microsoft is the best thing to ever happen to the anti-X markets. And we do not mean just in the snarky sense that it makes highly vulnerable operating systems and applications that need good security bolted on, but in the more important sense that the entrance of Microsoft into the anti-X markets was a wake-up call to every player, which gave them a mandate to make very tough choices with regard to belt tightening, product and market diversification as well as product integration.

Recommended Competitor Actions

• Yes, other anti-X vendors have also been moving to reduce their footprint on the host but not by reducing functionality. They have been working to consolidate agents, simplify management and perhaps reallocate some functionality out into the cloud. Competitors should make a clear distinction regarding their moves to reduce client footprint compared to Microsoft’s.

• This announcement emphasizes what all of Microsoft’s competitors already suspected: that basic consumer anti-malware protection was becoming a commodity. This announcement simply puts a date certain on a long time prediction. The sky is not falling. Anti-X vendors need to do what they have been doing since Microsoft made its first moves into the market five years ago. Namely, to diversify product portfolios, to expand the market segments they target, to develop products that operate at each tier (i.e. host, server, gateway, cloud), and to add additional value on top of basic anti-X capabilities (e.g., compliance and risk management).

• Competitors should view Morro as the equivalent of an open source anti-X effort. Microsoft has gained minimal market traction as a security provider and its brand is not strongly associated with security. Competitors should create FUD with respect to Microsoft’s commitment and ongoing support to the consumer anti-X markets.

• Competitors should be looking to poach OneCare customers immediately. Competitors could also attempt to create FUD within Microsoft’s enterprise security customer base by suggesting that this is but the first step in a broader pull out of the security markets.

Recommended End User / Customer Actions

• Existing OneCare customers should start shopping for alternative solutions. All consumer computer users should have some level of anti-X protection and OneCare customers should not simply let their OneCare contracts lapse without finding another security solution.

• Obviously no one should buy new OneCare service at this point and in fact consumers should probably start looking to other vendors for their security services.

• Enterprise customers should look to Microsoft for assurances that it remains committed to its enterprise security solutions.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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