The software, which will be available for download in the second half of 2009, will provide protection against viruses, spyware, rootkits, Trojans, "and other emerging threats."
I have no doubt this will cause at least some consternation for companies like Symantec, Trend Micro and Check Point that sell anti-malware software, but I'm hopeful it won't destroy the market for third-party security applications. It's in the interest of consumers for there to be a vibrant, competitive PC security marketplace.
My sources at security companies have told me they're not particularly worried. Laura Yecies, Vice President of Check Point software's ZoneAlarm division, said she doesn't "see Microsoft's recent announcement about free security as being significant for ZoneAlarm."
"This is not the first free product - those customers who have been willing to only get a free AV have already had choices for that," added Yecies.
At first glance, the Microsoft announcement is great news because people who are now paying $50 or more a year for protection can get what they need for free. While Microsoft OneCare has never been the highest-rated security suite, it has been a credible defense against malware. And I have no doubt Microsoft's new product will be adequate for many PC users.
I also think it makes sense for the company that makes the world's most popular operating system to offer free anti-malware software, as it makes sense for automakers to bundle air bags and seat belts.
But the comparisons between car safety and PC security can take us just so far. Unlike dangers behind the wheel, PC threats are constantly evolving as the bad guys find new and innovative ways to steal our information and invade our privacy.
Indeed, the types of threats have changed from viruses written by hackers out for a bit of ill-gotten fame to malicious programs designed by criminals looking for ill-gotten wealth. Keeping up with these criminals is a full-time job for thousands of security experts working for companies around the world.
This competitive marketplace benefits consumers and businesses and, ironically, even helps out the security companies. People I know in the PC security industry tell me there is a great deal of cooperation and information-sharing about threats and best practices, even while they try to one-up each other on features, performance and other issues.
There is a risk associated with Microsoft's decision to give away security software if it winds up destroying the market for other security companies.
For one thing, the competition keeps everyone - including Microsoft - on their toes, and fewer players could cause the remaining companies to be a bit more complacent. And if Microsoft were to drive other companies out of business, or simply dominate PC security, I would worry about its software's effectiveness.
Having multiple players in this field helps keep the bad guys at bay because they may be clever enough to defeat one product, but are less likely to get past the defenses of them all.
Microsoft's software will not be bundled with Windows but must be downloaded separately. I was told on background by a Microsoft employee that the company takes antitrust issues very seriously as it develops new products.
While this could have some impact on the revenue of PC security companies, it doesn't completely eliminate their market. For one thing, the Microsoft solution is not likely to appeal to large businesses that have come to expect a level of service that Microsoft is unlikely to offer at no charge.
Also, there are added features in many of the fee-based services like phishing protection, anti-spam and warnings before you click on a potentially dangerous Web link.
There are other product categories besides Windows PC security. All of the major security companies have, or are working on, solutions for mobile phones, including smart-phones like the BlackBerry and iPhone. There are also security products for Linux and Macintosh.
It's not as if Microsoft is the first company to give away security software. AVG offers a pretty good suite of security programs for free while other vendors, including Check Point and Trend Micro, give away pieces of their products, such as Trend's HouseCall virus and spyware scanner.
Still, I worry. Free is good but competition is also good. Let's hope that they can coexist in the world of PC security.
By Larry Magid