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Microsoft security service to ship in June

At $49.95 a year to defend PCs against Internet threats, it puts pricing pressure on rival offerings.

Microsoft plans to ship a new security product in June, charging $49.95 a year to shield up to three PCs against viruses, spyware and other cyberthreats, the company said on Tuesday.

As previously reported, Windows OneCare Live's June debut marks Microsoft's long-anticipated entry into the consumer antivirus market. That space has long been the domain of specialized vendors, led by Symantec and McAfee. Microsoft announced its intent to offer antivirus products in June 2003 when it bought Romanian antivirus software developer GeCad Software.

OneCare combines antivirus, anti-spyware and firewall software with backup features and several tune-up tools for Windows PCs. The product will be sold online and in stores, Microsoft said.

The software maker is following common routes to get its software into consumers' hands. It will offer a free 90-day test period and is working on deals with PC makers to ship OneCare on new computers, said Dennis Bonsall, director of Windows OneCare Live at Microsoft.

Buyers can install OneCare on up to three PCs that run Windows XP with Service Pack 2. This is a discount over rival products from Symantec and McAfee, which charge $119.99 and $139.99, respectively, before rebates, for three-user editions of their security suites. The Symantec and McAfee products are often heavily rebated.

"Up to three licenses is a real good deal," said Andrew Jaquith, an analyst with The Yankee Group in Boston. "I think it is very consumer-friendly and a good deal for families and SOHO (small office, home office) type businesses."

OneCare also includes support at no additional charge via e-mail, online chat or phone, Microsoft said. This compares to oft-criticized, mostly paid-support options from Symantec and McAfee.

Microsoft announced its plans for OneCare in May 2005. Invited testers have been trying it out since last July and a public test version was released late last year. About 170,000 people are testing OneCare. As a thank-you, testers can get a discounted rate of $19.95 per year if they sign up in April, Bonsall said.

Microsoft will sell OneCare on a subscription basis--a change from the traditional way security software has been sold. As long as a subscription is active, users will get signature and feature updates to guard against the latest attacks. Traditionally, users paid annually for signature updates, while a product upgrade required an additional purchase.

Symantec and McAfee sell their boxed security suite products for $69.99, before any rebates, and then charge an annual fee for signature updates. However, both security companies have also been moving to a subscription model.

In addition to adding subscription options, established security software sellers have prepared for Microsoft's market entry by adding anti-spyware to their security suites. Symantec later this year also plans to introduce a new product, code-named Genesis, that will be sold on a subscription-only basis and has many of the same features as OneCare.

"If Microsoft had not combined the two, you would still see the mainstream antivirus vendors all trying to premium-price all these things separately," Jaquith said.

Initially, OneCare will only be available in English on the U.S. market. Microsoft plans to have test versions out in other languages within the next year, a representative said.

The global antivirus market is growing; it reached $3.7 billion in revenue in 2004, up 36 percent from 2003, IDC said in December. The market research outfit forecasts the antivirus market will grow to $7.3 billion in 2009.

With OneCare, Microsoft is targeting consumers, especially those who do not run security or have let their current product expire. The company says it believes 70 percent of consumers fall into that category. In a recent research note, The Yankee Group estimated the niche as a market worth potentially $15 billion.

The company plans to include Windows Defender, an anti-spyware program, within Windows Vista, the update to the operating system scheduled to arrive before the 2006 holiday sales season. However, there are no plans to bundle antivirus software in Vista.

Microsoft is also eyeing the enterprise security market. It is working on a new Microsoft Client Protection product to defend business desktops, laptops and file servers against malicious attacks.