Rebate Programs, Bundling Deals
The Gartner analyst also pointed out that a consumer can get anti-virus software for free in aggressive rebate programs and from bundling deals with OEMs. He said Symantec and McAfee also make lucrative offers to lure consumers into switching anti-virus providers. "Gartner really doesnt believe Microsoft is doing predatory pricing--they are doing aggressive pricing using the three-user pricing that works out to be not tremendously different than the pricing by anti-virus vendors after you take into account all the [other] tactics like rebates and switching incentives," Pescatore said.Pescatore said the incumbents have known for at least two years that Microsoft was pushing into the security market and did not prepare properly. "Weve said long ago there would not be a stand-alone anti-spyware market, that anti-virus and anti-spyware were basically the same thing. The market has generally gone this way, and the few remaining anti-spyware vendors are finding this out and struggling to react," Pescatore said. Steve Orenberg, president of Kaspersky Labs U.S. unit, said he expects the price war to escalate even more in the coming months as the "Big Three" (Symantec, McAfee and Trend Micro) struggle to maintain market share. "If you go into any of the major retail stores, you see the usual suspects on the shelf, and theyre all going after the lowest common denominator. Over the last few years, the list price has gone down and down and down. Now that Microsoft is coming in even lower, it will get crazier," Orenberg said in an interview. Kaspersky is bucking the trend. The company sells its anti-virus stand-alone application for around $60 per PC, and there are no plans to cut prices to compete at the retail level. "Were going after an educated, technical consumer. We will compete at the technological level and let the others fight over pricing," Orenberg said. "Microsofts moves really dont bother us. Someone whos buying OneCare is probably not going to buy Kaspersky. Theyll take market share away from Symantec and McAfee. Weve decided to play in a different space," he added. Check out eWEEK.coms for the latest security news, reviews and analysis. And for insights on security coverage around the Web, take a look at eWEEK.com Security Center Editor Larry Seltzers Weblog.
"If the anti-virus vendors had been reducing prices or increasing value, Microsoft would never have had the opening to move into the market. The anti-virus vendors tried to keep margins high, and sell more products every time a new threat came out," he added.