Mad Dog 21/21: Playing For Keeps in Peoria

Published: June 15, 2009

by Hesh Wiener

When Chief Pontiac worked out a settlement with his British adversaries in 1766 and retired to what is now southwestern Illinois, he thought his place in history was secure. Three years later, he was murdered by a Peoria. Today Peoria means Caterpillar, not Native Americans, and Pontiac's name has faded, like the eponymous brand of GM automobiles. But no Pontiac suffered the ignominy of Windows Live OneCare computer security software, which, gelded and code-named Morro, will be given away, if it can be, by Microsoft, a company that just ceased making money.

Chief Pontiac: Survived years of war before the USA was a country, only to be murdered when he retired.

Microsoft is retrenching. So, too, are other software companies. The software vendors are, perhaps belatedly, following the path chosen by the chip makers a few years ago. Basically, Intel and Advanced Micro Devices, the two chip makers with the highest manufacturing volumes, decided to switch from making muscle chips with cranked up clocks and instead build processors that used smaller, simpler engines . . . but more of them. Today, these vendors can put up to four or six processors and the circuitry to tie them together on a die and sell the resultant engines at compelling prices.

Intel and AMD may directly affect the most users, but they are not necessarily the technology leaders. Sun, for instance, is the company with the most engines on a single die. Beginning in 2005, Sun put eight engines in its "Niagara" Sparc T1 chips and it adds extra glue technology and peripheral circuitry to the original Niagara's cousins, the Sparc T2 and T2+.

IBM, of course, offers multi-engine server chips in its Power family, and IBM asserts that its chips are the most powerful anywhere. Unlike Sun, Intel and AMD, IBM isn't yet outstanding when it comes to creating big computers with small electricity consumption; its Power chips are aptly named. Still, IBM has been making steady progress towards delivering cooler, greener servers, and when it says its virtualization is good enough to compensate for its hot chips, it does have a point. IBM was the dual-core pioneer back in the fall of 2001, and is set to go to eight cores with Power7 next year.

Still, even though IBM is reporting good financial results, its servers are not where the growth is right now. The server business these days is about riding out the downturn. Software companies that depend on the server end of the wire for business are having a tougher time than the ones who feed at the client end. They may feel like Chief Pontiac, who did a great job teaming up with the French in the middle of the eighteenth century, only to realize after a few years that New France was not going to beat the Brits. Pontiac had good reasons to pick the side he favored; the French were more inclined to sell him gunpowder and booze. But the best Pontiac could get from his choice was a little backing, a few years of war, and enough respect to work out a retirement plan that seemed pretty good at the outset but which, as I've pointed out, was fatal.

Well, software is a tough sell right now, but the software business is not as dead as Pontiac the Chief or Pontiac the muscle car. There's a lot of life in the client business if you know where to look. There's a lot of software being sold for use on clients that travel with the user, such as smartphones, netbooks, and perhaps laptops. Desktop computers are really excellent these days and provide wonderful value, but this season they are not selling like hotcakes.

A simple way to describe the current state of the client side software business is this: If it's not Vista, it's probably doing okay. Vista is an alluring product that was built in a flabby fashion on the presumption that the trend toward bigger (and probably more costly) computers that had been ongoing for decades would continue. Well, it didn't.

This is just awful for Microsoft, which, for a company so big has only a few major eggs and they are in just one basket: the short list of software products used on client machines. Microsoft's key products are Windows, which is available on some smartphones but is not the market leader; its Internet Explorer browser, which comes in large size and not the small size that alternative browsers, such as Apple's Safari and Opera provide; email software, where Microsoft's premier offering, Outlook, keeps getting heavier with each generation; productivity software, Office, which may have to be used in cloud mode on a smartphone; and security software, where Microsoft has just gone into potlatch mode.

Microsoft has plenty of competition in each of its key product segments, but it is without question the leader in some of the key areas once a computer is at least as big as a netbook. But even where it is dominant, it is suffering. Microsoft needs to recover a lot of lost ground whether or not the global economy rebounds, and its most vital product is Windows 7, which, by most accounts, seems like it will do the trick. Windows 7 will have coattails, and it will drag along a browser, at least one email client, and productivity software. The security software segment is problematic, however, because the market may be allergic to getting protective software from the company whose software porosity is the major reason the security business is so large and so lively. There's actually some pretty good logic underneath the market's emotional resistance to Microsoft's security offerings: It makes sense for security software to be created by people who think critically about the systems their products have to protect. A little disrespect in this corner of the software business improves the flavor of the product.

Still, if Microsoft suffers from some internal political conflicts, its two key rivals in security software, Symantec and McAfee, suffer from a severe case of the greeds. On June 10, the newswires carried a report on the hefty fines those two companies paid in a settlement with New York's attorney general, Andrew Cuomo, to settle claims stemming from their deceptive subscription renewal practices. The companies also agreed to stop sticking charges on the accounts of customers whose card numbers they had without actually getting orders. Yes, even in the security software business, there's a need for cops the taxpayers hire to watch the rent-a-cops in the antivirus racket.

Andrew Cuomo: Got Symantec and McAfee to pay $750,000 for sticking fees for fabricated software renewals on the credit cards of trusting customers who had turned to these companies for safety.

Not that it would be hard to find any computer professional who has glowing things to say about any of the security software companies, but some of the players, particularly the upstarts, treat customers with more respect than the industry's giants. However, for each of these ethical companies, there may be more than one totally crooked outfit masquerading as an antivirus vendor. The June 9 Patch Tuesday shipment of Windows fixes included software specifically designed to thwart some of the scammers who pretend to be in the security software business, companies whose code is called scareware.

But it turns out this is an old story. Microsoft has been going after scareware outfits for years and the best it seems to be able to do is temporarily reduce the problem.

If Microsoft releases free security software and it turns out to be really good when used in conjunction with Windows 7, that would be fine with most everyone, except perhaps Symantec, McAfee, Lavasoft (source of Ad-Aware), Trend, Panda, Grisoft (provider of AVG), Malwarebytes, Checkpoint (ZoneAlarm), Kaspersky, ESET (NOD32), BitDefender, Avast, and the other folks trying to survive in this segment.

None of these companies appear to be planning to shut their doors, and at least one, Symantec, has recently embarked on a last-man-standing type of strategy that for now seems to involve Amazon. Basically, Symantec is offering its two strongest security products, Norton 360 3.0 and Norton Internet Security 2009, at just over half list price. (Ordinary Norton Antivirus is on sale, too, but it is not the most practical choice for most users because it does not include a firewall.) The deals to look for, if you have two or three systems, are the one that includes a three-client license. To make the offers even more tempting, Amazon is throwing in free shipping on some of these products (read carefully as the deals seem to change every day).

Peter Norton: Philanthropist, art collector, and social activist whose reputation for decency helped Symantec earn public trust Andrew Cuomo found to be unwarranted.

If you happen to be a fan of the Norton products, and not everyone is, here's some advice based on the story of Chief Pontiac. Don't assume your one-off deal is the start of a whole new, secure life for you or your computers. Go for a longer term arrangement. Buy two or three boxes right now. Then, instead of renewing the software and giving the confessed credit card abusers at Symantec your magic numbers just uninstall the package in a year and install one of the other ones you bought with its new authentication code.

This advice is not only applicable to New York Attorney General Andrew Cuomo's favorite software houses, Symantec and McAfee. If you prefer Kaspersky, McAfee, ESET, Panda . . . basically just about the whole list I've already provided, most of their products are going for about half of list price on Amazon, too, and possibly for even less. Here, too, buying for two or three years right now is an option worth considering.

Now that I've pointed out this week's bargains, I'd like to add that I find it very hard to believe Amazon is going to keep its big price lead on other suppliers. As we go to press, Amazon is already raising its prices. All of Amazon's rivals are going to fall in line on price, and all the software vendors are going to work with them. The reason is simple. Everyone is hungry. And security software is one thing every computer absolutely needs. It's not something you can learn to live without if you have to, like General Motors.

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