Microsoft OneCare Jumps Out To A Big Start

Microsoft has entered the personal security market in the way it knows best: with aggressive pricing. With its cut-rate pricing and three-user license, Windows Live OneCare is now the number two selling security suite, according to The NPD Group.

OneCare sells for just $19.99 for the downloadable version and for an average price of $29.67 in the retail channel. Also, OneCare comes with three licenses for up to three different computers.

This is considerably cheaper than the $59.95 price for Norton Internet Security 2006 from Symantec, which is also only for a single-user license. NPD said Symantec leads the market with a 59.8 percent share as of June, but that’s down 10.1 percent from the prior month.

Meanwhile, in just one month since its release, Microsoft  was able to grab 15.4 percent of the security suite sales in June. This covers brick-and-mortar retailers like Best Buy and CompUSA and online vendors like Amazon.com.

“I was shocked because I don’t think anyone expected it to do that well,” said Chris Swenson, director of software industry analysis for NPD.

The success came on the strength of price, since Microsoft can’t compete on a feature level with a 1.0 product, said Swenson. “They just want to get the product in people’s hands, kind of like Symantec and McAfee giving away their low-end products to get customers on the back end with the subscription renewal.”

OneCare hit store shelves at the end of May, offering antivirus, anti-spyware and a better firewall than the one in Windows XP Service Pack 2, along with backup and performance tuning software.

Symantec and McAfee both have competitive products in the works, Symantec with Norton 360 and McAfee with Total Protection.

Peter Firstbrook, research director for security issues at Gartner, expects Microsoft to have a permanent impact on price.

“Their notion was as long as the price is high, people aren’t going to buy protection,” said Firstbrook. “Part of Microsoft’s motivation is to spread protection because if everybody is secure, we are all collectively secure.”

Firstbrook hasn’t done an evaluation of OneCare but has heard it’s a little slow and heavy on the system requirements, but points out it is a new product.

“It’s going to take [Microsoft] a while to figure this game out and get it right. They’re still brand new. But the channel’s going to love it. I fully expect them to have the majority of marketshare by 12 months from now,” he said.

That will come through price and Microsoft’s name. The company may get criticized regularly by the technically-savvy, but there’s a lot more technical novices out there.

“For people who don’t know a lot about computers, one thing they know is Microsoft,” said Firstbrook. “Based on brand name, sales presence, channel presence and price, I think they will probably have a pretty big share of that consumer market.”