My Mom switched to Microsoft Essentials

I first heard about MSFT Security launch at dinner from my Mom, she had installed it on her laptop.

I asked “already ?”.

Today several people in the hallway at work were talking about it (I work at McAfee), there were emails flying around. It was very interesting to hear/read: people said the detection is not good, MS should stick to their business, people won’t trust MS …. Our business is safe.

I was like hmm… my mom switched. Maybe I am new to MFE and have not drunk the cool-aid. Then another thought struck me, completely unrelated about my Mom’s practice (she is an OBGYN).

“People will switch because they don’t know the difference”

In my mom’s practice she tries really hard that her patients don’t have a c-section. Many of her students on the other hand advice their patients to have one by default (doctor’s make more money when you have a c-section). I heard this as a kid growing up. Then one day while waiting for my mom at her clinic, I heard two expectant mothers talking:

“I really like that doctor. My first delivery was so painless. I picked an auspicious date, went in, they were ready for me. No labor pains, anesthesia, when I woke up baby was there, I was home 2 days later and walking in a week. All my colleagues tell me they went through enormous pain, I just don’t get it”

I said “wow”.  Look at it from her point of view: no rush, scheduled delivery, no pain, she doesn’t know the difference what is good or bad for her down the road.

As I was hearing these folks at work it was dejavu. The don’t get it, most consumers can’t make out the difference.

From their perspective, its free, it does not slow down the system and it is from a respectable company Microsoft. They get spyware with MFE or SYMC or AVG. They will get some with MSFT, its not something in their control or something they care about.

Fascinating to watch at home and work. Who will get it right? What does the consumer really care about?

Symantec versus McAfee

Great Article

http://harbor.typepad.com/analysis/2009/07/symantec-vs-mcafee.html
Symantec (SYMC) and McAfee (MFE) are software companies known best by consumers for their antivirus packages.  Symantec is the market leader in almost every segment it operates in, whereas McAfee is generally number two.  Partly due to recent strong revenue growth and partly due to an aggressive marketing strategy to get its software installed on computers by the original equipment manufacturer, McAfee shares are trading at about twice the earnings multiple of Symantec.  Given that Symantec has historically outperformed McAfee, McAfee’s strategy is risky, and the current valuation implies that McAfee will outperform even beyond the horizon visible to analysts, I see an interesting long/short opportunity.

Overview of Thesis

SYMC and MFE are nearly identical companies with the primary difference being that Symantec is larger and involved in data storage, management, and backup.  The key short-term strategic difference is in growth strategy. A few years ago, SYMC seemingly choked on the acquisition of Veritas, a large data storage and management company, but they have since been able to integrate Veritas into a coherent Symantec.  During this integration process, McAfee has been able to gain market share by bundling software into easily used suites for consumers and small businesses, a trend SYMC missed in 2006.  MFE is now attempting to steal market share from SYMC by entering into agreements to have a free-trial of MFE software pre-installed on PCs.  While management and many analysts are optimistic that this will produce strong results, the long-term benefits are limited.  The average user that pays for antivirus software after a free-trial period remains a customer for approximately three years.  If SYMC decides they are loosing valuable market share to MFE’s OEM strategy, they can simply compete by offering OEM’s an equal or better deal than that offered by MFE.  Oligopolies naturally form for a reason, and number two players generally don’t have much success waging turf wars against the number one players by spending more money on distribution.  MFE doesn’t have any sort of a long-term competitive advantage with the OEM strategy.  However, SYMC has an established data storage and management business that offers something unique to customers and will take a while for competitors such as MFE to duplicate.

Analysts’ forecasts for revenue growth from 2008 to 2010, according to Bloomberg, are 29% for MFE (65% earnings growth), and 4% for SYMC (22% earnings growth). This leaves MFE trading at 23x 2010 earnings, compared to 14x 2010 earnings for SYMC, indicating that either McAfee will outperform well beyond the horizon visible to analysts or they will grow earnings by more than 65% over the next two years and maintain it.

To read more: http://harbor.typepad.com/analysis/2009/07/symantec-vs-mcafee.html