Daily Archives: August 11, 2009

Microsoft’s Anti-Malware Passes Test that Symantec Fails

For a long time now, anti-malware vendors have pondered the possibility that Microsoft eventually would release a free Windows-based security suite that would prove effective enough to kill off or seriously enfeeble the paid-for products of security stalwarts.

Until now, vendors of anti-malware consumer products have debunked the idea. Symantec, in particular, suggested that Microsoft would never get it right or would leave enough gaps for competing revenue-generating anti-malware products to remain commercially viable.

It might be time for Symantec to revisit those assumptions.

Virus Bulletin has published its latest evaluation of anti-malware offerings. The results are good news for some, including Microsoft, and bad news for others, including Symantec.

First, a little about the Virus Bulletin methodology, as channeled by Ars Technica:

Virus Bulletin (VB) conducted its latest test in July, posting the results this month. The security research company evaluated 35 anti-malware products for the 32-bit version of Windows Vista SP2 Business. The basic requirements for a product passing the test is detecting, both on demand and on access, in its default settings, all malware known to be “In the Wild” at the time of the review, and not detecting any false positives when scanning a set of clean files. The products were pitted against about 3,000 unique samples of malware that fall into four categories: WildList viruses, Worms and bots, Polymorphic viruses, and Trojans.

You can see the list of products that passed and failed at Ars Technica, which also links to Virus Bulletin, where subscribers can peruse the actual report. I just want to note that most of the major security vendors passed the test, including McAfee, Sophos, F-Secure, Kaspersky, and the like.

Microsoft’s Forefront Client Security was also among those accorded a passing grade. That rates as a significant development.

Also significant is that Symantec’s Endpoint Protection failed. As Ars Technica reported:

Symantec’s failure is particularly unacceptable as the security giant is often talked up as the top dog in the market. Microsoft’s success with its Forefront product is promising not only for business users, but for consumers as well, given that the upcoming Microsoft Security Essentials product is closely tied to it.

Well said, but let’s consider the commercial implications. Microsoft security-product marketers will be all over this news, while Symantec marketers will be running in the opposite direction.

It’s one thing to sell anti-malware when you can make a case that freeware doesn’t perform as well as your for-pay products. But what happens when that’s no longer true? What happens when Microsoft Security Essentials, which will cost consumers nothing, can do as good a job at securing Windows-based PCs as can a decidedly more expensive offering from Symantec?

At the point, what happens is a sea change in the marketplace.

At least Symantec still has its enterprise and SMB markets to provide comfort and joy. Unfortunately, it’s losing ground in those markets, too.

Reports Say Dell Will Launch Its First Smartphone in China

Dell apparently is getting into the smartphone business, but it’s picking its spots, at least initially, with great care.

Reports derived from a wayward email message and a Chinese technology website indicate that Dell is poised to release an Android-based smartphone for the Chinese market.

The Dell smartphone apparently will be called the “Ophone mini3i.” The model will carry the Ophone naming prefix because it is being branded and sold by China Mobile as part of its Ophone handset family, which encompasses other Android-based models including forthcoming models from Lenovo and HTC (which goes by the Dopod brand in China).

Technically, the Dell, Lenovo, and HTC handsets will run the OMS operating system, which is Android tweaked to run on China Mobile’s proprietary TD-SCDMA 3G network. Presumably, then, the Dell Ophone mini3i will run on TD-SCDMA, preventing it from working on European or North American networks.

There appeared to be some confusion on that front, however. An email apparently making the rounds on a China Mobile mailing list suggests that the Dell mini3i would work on China Mobile’s legacy GSM network rather than TD-SCDMA 3G. I suppose we’ll know the facts soon enough.

Presuming at least some of this scuttlebutt to be true, it’s interesting that Dell would choose a China-only debut for its first smartphone.

Then again, the product-family nomenclature — admittedly not chosen by Dell — gives the game away, doesn’t it? Ophone. It’s a bit subtle, sure, but what does it remind you of? Ahh, yes. And what national market has Apple’s iPhone not entered yet?

Dell must believe its new smartphone will have a better chance of success by going to where the iPhone isn’t — not yet, anyway — as opposed to invading turf where the iPhone already has staked a considerable territorial claim. It’s a wise move, I think.

Looking Back, Delicious’ Schachter Suffers Seller’s Remorse

Those who report on mergers and acquisitions sometimes forget that the deals often end badly. Statistics vary, but research shows that anywhere from 50 percent to 80 percent of acquisitions fail — in that they produce negative results or deleterious consequences for the buyer — or don’t live up to their potential as measured by revenue or market-share gains or ROI metrics.

Some companies have better acquisition track records than others. Cisco Systems, for instance, does a good job of identifying, acquiring, integrating, and assimilating companies and their employees. It has had misfires, of course, with StrataCom — an early and sizable acquisition — being notable among them. Other companies — Alcatel-Lucent springs readily to mind — have not fared nearly as well in the M&A field.

Yahoo is another company that hasn’t enjoyed a stellar record at the M&A casino. It seems to put its chips down on the wrong number far too often, and it occasionally fails to play a strong hand as well as it might have done.

Everybody has heard of buyer’s remorse, and most of us have experienced it at some time. A lesser-known phenomenon is seller’s remorse.

One man with a distinct case of seller’s remorse is Delicious founder Joshua Schachter, who sold his company to Yahoo in 2005.

At the time of the acquisition, Schachter had high hopes for Delicious and for how Yahoo could make it bigger, better, and more popular. Things didn’t work out. The promise of the merger wasn’t realized, neither party benefited to the degree they’d imagined, and elation was soon supplanted by disappointment and regret.

There’s no question that Schachter looks back in sadness if not in anger:

I wish I had not sold it to them (Yahoo). The cash and freedom do not even come close; I would rather work on a big, popular product.

There’s a lesson here for founders and entrepreneurs. The lesson is not that you shouldn’t sell your company. Sometimes there are very good reasons for selling a company, either because the offer is too good to refuse or because the commitment of the buyer to enhance the value of the property is enduring, sincere, and strong.

No, the lesson here is that once you sell your company, it’s no longer yours. Founders and entrepreneurs often don’t internalize that reality, and it leads to personal grief for them and to exhausting conflicts with their new colleagues. If founders can’t make that cognitive and emotional disconnection, they shouldn’t do the deal or they shouldn’t include themselves as part of the transaction.

Either way, nobody wants to be afflicted with seller’s remorse.

Extreme Networks Snaps Up Soapstone’s Software Assets

Late last month, I held forth on the dissolution and liquidation of Soapstone Networks. Well, not all of that company’s assets will go into the dustbin of networking history.

As reported by Network World yesterday, Extreme Networks is buying Soapstone’s software assets — for provisioning services and assuring service levels — to strengthen its commitment to and offerings for carrier-Ethernet networks.

Terms of the deal were not disclosed, but one can imagine that Extreme got a sweet deal on distressed assets. Soapstone’s erstwhile software will be integrated into Extreme’s EPICenter network management system.

Security Vendor Fortinet Files for IPO

Although no details are available on the number of shares to be offered or on the price range of the offering, security-vendor Fortinet has filed a registration statement for a proposed IPO.

According to reports from Reuters and Dow Jones Newswires, Fortinet intends to use the IPO to raise up to $100 million. The proceeds would be used to develop products and potentially to make acquisitions.

Fortinet is a leader in the intensely competitive and highly fragmented market for Unified Threat Management (UTM), an all-in-one-box approach to Internet security that involves cramming defenses for email, web traffic, and intrusions and hacking into a single appliance.

The benefit to such an approach, which appeals primarily to small- and medium-size business (SMBs) as well as to some branch offices, is that it is easier to manage and less expensive than an array of specialized point products. The drawback is that the buyer must sometimes sacrifice solution depth in favor of breadth. Put another way, you rarely get the best of everything in an all-in-one security appliance, but you at least get protection for each type of vulnerability.

Although Internet-security products have not proven completely immune to the global downturn, the market for them has not cratered, with most customers in the corporate world continuing to buy and update security offerings.

After some ups and downs, Fortinet’s financial performance has stabilized and become more predictable. In the first half of 2009, according to Dow Jones, the company’s loss narrowed to $916,000 from $5.1 million while revenue increased 15% to $115.5 million.

Fortinet has disclosed neither the exchange on which it intends to trade its share nor the symbol under which those shares will trade. The proposed IPO’s lead underwriters are Morgan Stanley, J.P. Morgan Securities & Co, and Deutsche Bank Securities. Robert W. Baird & Co., RBC Capital Markets Corp., ThinkEquity LLC, JMP Securities LLC and Signal Hill Capital Group LLC will serve as co-managers.

In five rounds of venture funding, Fortinet raised more $100 million Redpoint Ventures, DCM-Doll Capital Management, Acorn Campus, DEFTA Partners, Fortunetech Partners, LLC., Forval Creative Inc., and Meritech Capital Partners.