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As consumers, we all want to pay less and get more. Microsoft seems to be trying to give us just that, as they incorporate more and more of what used to be “add on” software into the operating system and offer low cost services that provide others. Windows XP included a built in firewall, a product that you once had to buy separately from a third party vendor. Now Vista is adding Defender, an anti-spyware application, and OneCare is a service-based “bundle” of security applications priced considerably lower than those of the major third party competitors in the market.

But is there a downside to getting all your protective programs from the same source that makes the OS? Proponents of Microsoft’s model say no, that having it all made by MS means everything integrates more fully, ensures better compatibility and saves people money. Others aren’t so sure.

At what point does giving customers a good value for the money turn into predatory pricing? Will Microsoft drive all the third party makers of security software out of business by giving it all away – and perhaps then raise their own prices when all the competition is gone? This is a story we’ve seen played out before: prior to the inclusion of Internet Explorer in Windows, Netscape charged for its web browser – today, consumers expect web browsers to be free, and although Netscape now is, it never regained a significant amount of the market share that it lost in the battle with IE.

On the other hand, despite the fact that XP users get the Internet Connection Firewall free with XP (upgraded to the Windows Firewall in Service Pack 2), personal firewall brands like Kerio, ZoneAlarm and others are still around and going strong, and users are still willing to pay for good firewall software. Why the difference? The Windows firewall is generally seen as a “better than nothing” but not a sophisticated firewall product, and people want the extra features such as control of both outbound and inbound traffic, more friendly user interfaces and other advantages that they get with third party firewalls.

We all know that Microsoft isn’t the only example of how aggressive “low balling” on prices can crush competitors who can’t afford to operate without making a profit. Large oil companies took a similar approach years ago, driving most of the “little guys” out of the business and locking in their stranglehold on the American gasoline market. Superstore retailers like WalMart have, in some areas, practically eliminated the “mom and pop” local businesses used to dominate Main Street.

If we end up with few or no choices other than Microsoft for security software, the public will have to bear much of the responsibility, though. Computer users have been clamoring for years for more built-in security, and complaining about having to buy additional software to provide that functionality. So you could say that, if competitors are driven out of business, we’re only getting what we asked for. On the other hand, those who didn’t ask for it, and who prefer to buy their security software from companies that specialize in security, may also lose their ability to make that choice.

Tell us what you think on this issue. Can Microsoft can and should do everything, or would you prefer that they stick to what they do best: making operating systems and productivity software? Do you prefer to buy your security software from a third party vendor? Are you willing to pay a higher price for better software or are the basic built in protective mechanisms good enough? Is it a violation of anti-trust laws to offer products at prices that make it difficult or impossible for competitors to compete? Or are you in favor of anyone who offers the lowest price?

Or vote in Sunbelt’s poll: tell us whether you trust Microsoft’s client security vs. traditional AV companies. 

Deb Shinder