Protecting over 200 million PCs, Macs, & Mobiles – more than any other antivirus

July 20th, 2009

Why is avast! not pre-installed on my new computer?

Some people have asked me why when they buy a new computer our avast! product is not already installed.  They complain that they have to remove the anti-virus product that is on the computer, download avast!, and then install it.  And of course, they ask why we don’t get the computer manufacturers (HP, Dell, Acer, Sony, etc.) to just install avast!.

This article from the New York Times (http://www.nytimes.com/2009/07/06/technology/business-computing/06virus.html?_r=1) talks a bit about the business but in much smaller terms than it actually is.  As the article states, getting security software on new computers can be very valuable.  It is a business I knew quite well from my time at Symantec. We would love to do this as the time when most people need a security product is when they buy a new computer.  The reason we don’t do it is that it is that putting software on new computers is a very big and very expensive business.  Manufacturers (OEMs) make a lot of money from the software that is provided on the computer. The OEM security business is what I call one of the “dirty little secrets of the PC security business.”

The article states that last year McAfee spent $55M in payments to computer manufacturers (OEMs)—the most of security vendor.  While I do not know if McAfee did spend $55M, public information tells us that the total amount paid to OEMs is many, many times bigger.  As the author of the article points out, it can be difficult to find the costs on the books of the security vendors.  Now, I have to be careful here as I do have knowledge of a lot of data from manufacturers and others that is probably not public.  So, we will do a simple analysis using public data and some basic rough assumptions.

If we go to a recent Symantec 10K (page 37 of the June 1, 2009 10K), there is a statement that the extra $150M in cost between 2007 and 2008 is as a result of higher OEM placement fees.  And in the earnings transcript call for that same time, the Symantec CFO states that the higher fees will impact earnings by 1.5 cents a share—or about $156 million.  Now this $150 million is just an increase—meaning the total amount spent is higher than that.  If we assume that this increase was a 100% increase (that is their costs doubled), then they spend over $300M a year.  If we assume that the increase was a 50% increase, then they spend $450M a year.  And that is just with Symantec.  Putting similar amounts in for the other big security providers and you can see how the total given to computer manufacturers can easily top $500 million a year—in the range of $600M to $900M.  Other data shows that there are about 100M consumer PCs sold a year so this equates to $6 – $9 per machine.  To make calculations easier and since we are just dealing with approximations, let’s assume this is $5 – $10 per machine.  Now of course these are all rough estimates but they should be good enough to get us into the ballpark.

Let’s take a couple of examples and you will see we cannot afford to have our software installed on new computers.  First, most of the security software on new computers is what we call “Trialware”—a product that works for 30 – 90 days, begs the customer for money during this period, and then stops working if the user does not pay.  The user is typically charged about $50/year for the software.  And in almost all cases this is done as an “autorenewal”—that is the consumer’s credit card gets charged automatically again a year later, two years later, three years later, etc.

OEM agreements are usually structured as bounty contracts or as revenue sharing contracts (or a combination of the two).  A bounty is just that—the security company pays the manufacturer a certain amount for every computer on which the manufacturer installs the software.  A revenue share contract is where the OEM gets a percentage of the sales from users paying for the trialware.

Let’s say that a computer manufacturer makes 20 million consumer computers a year.  If a security company pays that manufacturer $10 for each computer, it is a $200M payment.  If they pay $5.00, it is a $100M payment.  Then if 10% of the users decide to pay, the security company makes:

  • $100 million in the first year
  • $75 million in the second year if 75% of the customers continue their subscription (McAfee in many places has claimed their autorenewal rate is over 80% so this seems a nice estimate)
  • $56 million in the 3rd year

So, over three years the security company can make $231 million—but they have paid the computer manufacturer between $100 million and $200 million upfront.  That means that 40% to 80% of what the consumer pays goes to the OEM and not the security software company.

In a revenue sharing agreement, the OEM is not paid upfront but gets a percentage of each year’s sales.  As the OEM is now taking a bit of the risk, one would expect that over a 3-year period, they would make a bit more than on the pure bounty agreement.  That is over a 3-year period, it is reasonable to assume the OEM would get at least 50% of the total value. And of course it is also possible to blend these approaches a bit—a smaller bounty payment coupled with a smaller revenue share.

So, in OEM agreements, security companies pay the OEMs a tremendous amount of money for the right to try to sell their products to the new computer buyers.  The OEMs don’t provide anything except access to a customer—very expensive access.  So, without a high-priced product it is just not possible to pay the OEMs the amount of money that they want.

So it is clear that the OEM business is a big business.  And remember, the money paid to the OEMs comes directly from the consumer.  If the security companies did not have to pay these monies, they could cut the price of their product by 50% – 75% and still make the same profit.

Instead of enriching a middleman, we believe in the free distribution.  We make our home product free—if the user decides they need the additional protection in the paid product, they can then upgrade.  So, if you have a new computer or know someone that does, go to http://www.avast.com/eng/download-avast-home.html and download the free product, install the free product, and then remove the trial ware that came with the computer. You should be able to install avast ontop of whatever security product your computer has.  If that does not work, then after you download avast, disconnect from the internet, remove the old OEM security, and the install the avast product.

If you wish to contact me or comment, please do so here.  You can also find me on linkedin, facebook, or YIM.  I am sure you can figure out how to contact me….

Categories: CEO's corner Tags: , ,
  1. CharleyO
    July 20th, 2009 at 15:55 | #1

    ***

    Thanks for the explanation of why avast does not come pre-installed on new brand named computers. That should make the answer clear to most users. Since I build my own computers, avast does come “pre-installed” (so to speak) on my computers. But, I have a small problem with the your very last sentence.

    I have stated many times on the avast forum about the correct steps to install avast on a computer that has some other av product installed previously. But still, as above, it is told to potential users as stated above … remove the pre-installed av product and then download avast.

    Whatever the prior av product is, it should not be uninstalled before downloading avast! If not, then the computer is unprotected while avast is being downloaded. This is not good because during that time, the computer could become infected and then when the user tries to install avast, it may not install correctly leaving the computer infected and possibly broken from a non-technical users’ point of view. Who do you think will be the blame for that by the non-technical users’ point of view? The below should be the simplified steps for installing avast on a computer that already has some other av product previously installed.

    1 – download avast av but do not install.
    2 – download the proper removal tool for the previously installed av product.
    3 – disconnect from the internet.
    4 – uninstall the previously installed av product using their instructions.
    5 – use the proper removal tool for the previously installed av product.
    6 – install avast av.

    As I stated above, those are the simplified steps and I am sure someone can add additional steps or information. We should be aware of how quickly an unprotected computer becomes infected. Never, ever should a computer be allowed on the internet for even seconds in this day and time.

    Thanks again for your above answer to a question many people ask,
    CharleyO

    ***

    • July 20th, 2009 at 21:11 | #2

      Thanks for the correction Charley. You have in fact specified the proper way. I have corrected.

  2. Tech
    July 20th, 2009 at 22:14 | #3

    I think the procedure will bring difficulties to the users (antivirus conflict).
    Post more details in avast forums here: http://forum.avast.com/index.php?topic=46965
    Basically, I agree with Charley, you need to uninstall the trialware that come with the computer first.

  3. Mr.Agent
    July 21st, 2009 at 18:09 | #4

    Dears Vincent,

    You made a mistake spell and if you want to correct you can look here http://forum.avast.com/index.php?topic=46965.0 and read my post.

    Thank and Bye.

    Mr.Agent

  4. July 22nd, 2009 at 23:26 | #6

    Je n’aurais jamais penser que les société payais pour etre sur le pc a l’origine.
    Comme quoi sait toujours l’utilisateur final qui finis par payer sans savoir qu’il a été diriger vers un choix qu’il n’a pas forcement.

  5. July 23rd, 2009 at 00:54 | #7

    I think it would be a great Idea to have avast pre installed on p.c.s. It is by far one of the best security tools out there. The boot time scan inables you to scan the files that are in use when the os is running wich most others don’t.

  6. July 23rd, 2009 at 00:57 | #8

    Avast – it’s the best antivirus, never doubted! Sorry, I’m from Russia

  7. July 23rd, 2009 at 01:25 | #9

    Missing word in the first paragraph…

    Some people have asked me why when they buy a new computer our avast! product is not already installed. They complain that they have to remove the anti-virus product that is on the computer, download avast!, and then install it. And of course, they ask((((( WHY )))) we don’t get the computer manufacturers (HP, Dell, Acer, Sony, etc.) to just install avast!.

  8. 阿星
    July 23rd, 2009 at 01:29 | #11

    我的avast 已经显示过期,怎么更新不了?怎么办呢?下载什么补件?

  9. JP
    July 23rd, 2009 at 02:19 | #12

    I think your snti virus is the best. I paid $100 for NOrton’s, then 3 months before the renewal date, a box popped up asking me to renew then. I had purchased the new version and had planned on taking the old verizon off, then installing the new product. Now remember it asked me 3 months before it expired to renew. I didn’t renew and it blew off my whole computer os system. I had to re-install windows. On another computer I had McAfee and the same thing happened. I boxed both Norton’s and MaAfee back into the box, took them back to the store and got my money back. I then heard from a friend about Avast. I installed it on both computers and I have never gotten a virus or had any other problems. i think your anti virus is the best. Oh by the way while using Norton’s and McAfee’s, I got quiet a few viruses which they never caught. On my Norton’s and McAfee, I had to download or rather update the software manually. That is another thing which I praise your software for, every time you turn on your computer, the anti virus updates it’s self automatically.
    My friend sprent much money on purchasing Norton’s, until his last version blew out his computer along with losing all his data. He was furious, so I told him to try your AntiVirus, which he loves. He and his wife both us Avast and love it. Your software should be the #1, because Norton’s is impossible to uninstall on some of their packages and McAfee took me 8 hours to pick out the files stored on my hard drive of Windows 98. I have all X-P Home edition except for 1 computer which runs Windows 98, in order to use an older printer. Thanks for your technical staff which has made your software so great and readily catching the viruses. Your software has caught quite afew, which the other ones missed.
    It is not so easy to uninstall some of the other av, because the program was writter great but the uninstall was not properly written.
    Sincerely,
    JP

  10. July 23rd, 2009 at 03:00 | #13

    مرحبا
    هل هذا الافاست جديد شاكره لكم ارساله لي

  11. July 23rd, 2009 at 03:04 | #14

    thank you

  12. Robert
    July 23rd, 2009 at 04:50 | #15

    It would make life easier for non technical users for Avast to include a triware removal program to completly remove preinstalled programs.
    I find to uninstall triware’s makes life hard for those non avid computer users.
    I’m talking about are Mcafee and Norton…

  13. Fred Bittel
    July 23rd, 2009 at 06:59 | #17

    I am so glad I found Avast! I had Norton on one of my computers and it did not detect a downloader virus nor could it remove it. I had to perform a destructive restore to set the computer back to factory specs. A real pain. I replaced it with NOD. I purchased another computer an immediately removed all vestiges of the OEM Norton and replaced it with NOD.I just replaced both NOD PC’s with Avast! I will also put Avast! on my third (backup) computer. Thank you for your technical expertise in a fine product.

  14. Louis Cools
    July 23rd, 2009 at 08:06 | #18

    Interesting info. Remark, WHY do you use this strange YELLOWISH colour, as part of the blue printing EASY TO READ, where the yelowish is VERY DIFFICULT TO READ.
    This kind of little details are important, as you want to bring a message AS CLEAR AS POSSIBLE. For the rest congratulations.

    • July 23rd, 2009 at 18:52 | #19

      Thanks for the feedback Louis. We are working on our new color schemes and will take a look at this. A few people have echoed your comments.

  15. Kandyang Modi Dumo Jansuk
    July 23rd, 2009 at 08:51 | #20

    Thanks alot for the hard work you, friends are doing behind the lab for a provision of safe use of our computers!!!

    I just realised that avast! is the best choice for all those who wish to have the best antivirus protection available in market these days!

    Hope you will continue to do your best to keep us happy always!!

    Thanks very much……………

  16. July 23rd, 2009 at 10:20 | #21

    est super anti virus

  17. Daniel Dalon
    July 23rd, 2009 at 10:43 | #22

    This is a great article. I resell computers and most of my customers are usually at first “avast” to shelling hard dollars in purchasing norton or the Macafees AVs, so we invariably uninstall them and put on avast. The strange thing is a year later when the customer decides to pay for his antivirus, he always chooses avast, not the others pre-installed AVs.

    Now another horribly pre-installed is MS-office. After the 60-day trial, all your documents freeze and refuse to open. When our customers come to us, we always warn then of the fact. And when they hear the king’s Ransom they have to hand over to microsoft to activate the office they generally settle for open office. When finally of course they decide they really need the office, they tend to avoid the latest pricey office 07 and generally settle for the older giveaway product office 03 or even 2000.
    I believe that by avast given away its AV for free it’s sensitising future and potential customers to its products powers and capabilities. people will remember that it is a good product and stick with it…what is that age-old saying?The devil you know is better than that angel you do not know…especially if that angel wants to force you into paying large sums for something you know nothing of.
    Again by given their product for free Avast is generating alot of goodwill. people will always remember, when tney are in a position to pay for thier antivirus, that there was once a friend called Avast that helped them when they had nothing, and what better way to show there gratitude than reward avast with a sale!
    And finally, by giving their software for free, avast is infact denying their competitors some customers… a great biz strategy!

  18. Pierre Te Angina
    July 23rd, 2009 at 10:50 | #23

    thanks

  19. Romolo
    July 23rd, 2009 at 11:11 | #24

    Having used Norton (Symantec), McAfee, Dr. Solomon, Kaspersky, NOD32, AVG etc. I have opted for the Free AVAST. I have now used it for 4 years and have never been infected with anything. I occassionally experienced some problems with the Outlook plugin but that has now been fixed so I am a happy user. If I have a minor niggle is that the interface (which fortunately I rarely have to use) is a little confusing, but other than that it’s an excellent product. Well done guys.

  20. JPG
    July 23rd, 2009 at 13:38 | #25

    Avast is a good product, but …
    “Why is avast! not pre-installed on my new computer?”
    It’s just like your link in the “avast! iNews” which open MSIE whereas my default browser is FF :)
    Best regards.

  21. Uduak
    July 23rd, 2009 at 14:21 | #26

    I really love your product and to me its the best av around, keep it up guys

  22. Dee Dee Gould
    July 23rd, 2009 at 14:27 | #27

    Thanks for the information. I know that all good things are hard to come by…..and that applies to antivirus software. I tried all the others, and they could not do the job! One must take the time to remove less than efficient antivirus software installed on new computers, or purchased by mistake…..and install avast.

    Avast is unbelieveably DEPENDABLE and EFFICIENT. Thanks for protecting my office computer for the last ten years….and, I have convinced my family that Avast must remain the antivirus software of choice on our home computer as well. I don’t take chances, I like Avast Professional and will remain a loyal subscriber to your excellent product!

  23. Salvador Ortega
    July 23rd, 2009 at 16:07 | #28

    Muy bien explicado CharlieO.

    JP, Robert, usen REVO unistaler, quita de manera sencilla y completa los “trialware”

    Daniel Dalon, usa Open Office, puede leer todos los formatos de MS Office tranquilamente ¡y es mas compatible que MS Office!

  24. Peter nelson
    July 23rd, 2009 at 17:07 | #29

    I wish to thank the Avast! team for all their work over the years. I have used this software for many years, and I found it’s easy interface & protection second to none. I have always recommended Avast! to friends & colleages (most of them are new to computers), over the years, and when they bought a new PC, had to uninstall the anti-virus which had been installed at the factory, and install Avast for them plus show them how to register.
    Many thanks again.
    Peter.

  25. tony
    July 23rd, 2009 at 17:43 | #30

    Thank you. Not being a computer Geek (Name is used with respect to genuis) we had mcafee and norton and our computers ran so slow. Afraid of virus crashes which I incurred twice with mcafee INSTALLED Avast has been excellent. So thank you. We are now looking into upgrading

  26. Mr.Agent
    July 23rd, 2009 at 19:19 | #31

    Avast! is like my super hero for me he is like Batman :D Also Vincent i hope you enjoy to work with them you really did choice a really good business and work. I hope you and the others you keep working hard on this product because many guys and girls i see use your products. Also i see many expert and specialist that recommand your product. Keep up this great work guys and girls. I also didnt understand why the customer of computer dont put in their computer your Avast! 4.8 Home or Pro. Because my self there a lot people that use your product and i can say your Avast! 4.8 Home/Pro are both great and its ideal for the Home or Commercial User for the Pro version also for got a really great anti virus on their computer like your. And also safe surf.

  27. July 24th, 2009 at 08:27 | #32

    @阿星

    请问你是用HOME EDITION还是PRO EDITION的?

  28. July 24th, 2009 at 17:41 | #33

    avast! is the MOST TRUSTED PC SECURITY SOFTWARE i never had!! :-D … last time I uses AVG… pretty ok but then i feel that something is dissapoint me about AVG.. THE LINKSCANNER and IT DON’T HAVE P2P SHIELD!!.. then I started to uses avast! home 4.8 ….and i feel WOW.. a complete protection..it detects 3 viruses that AVG doesn’t detect it…. and ITS FREE….. :-)

    EXCELLENT, MAGNIFICENT…it is.. avast!

  29. Kyle Grant
    July 24th, 2009 at 21:39 | #34

    I would just like to say keep up the good work Avast, I understand a free product like avast would be hard to pre-Intsall on a new computer , but It would be great to see Version 5 Free in October. Keep up the good work.

  30. Howard Griffiths
    July 25th, 2009 at 05:08 | #35

    The blog is hard to see using the yellow font

  31. Glen
    July 26th, 2009 at 03:56 | #36

    Hi Vince, I searched for you on Facebook but do not find you there. I did find a couple of Avast groups on Facebook, but you were not listed on them either.

  32. Razvan
    July 27th, 2009 at 08:03 | #37

    I switched to Avast couple of years ago and NEVER got a virus again!
    Keep up the very good work you guys are doing.

  33. Lance
    July 28th, 2009 at 05:38 | #38

    Having been a long time user of PC-cillon, I became very disappointed with the slowness that began to creep into the boot up and especially some unresolved problems when opening Outlook Express. With many attempts to get matters resolved from the Tec Support and an increasingly frustrating response I decided to give them the flick. My sister in the US put me onto Avast and I havn’t looked back….
    Thanx!!
    I do have a suggestion and that is to put a scan system similar to the system used in Trend Micro’s product. I want to set the schedule for a complete scan and be able to do a manual one at any time; your product does not lend it’s self to doing this. I have to open the icon on my computer and go from there rather than just clicking onto the toolbar icon and opening a user friendly menu.
    PS: A “Spell Check” on this site would be helpfull….
    Best regards,
    Lance

  34. July 28th, 2009 at 13:16 | #39

    The OEM approach is one of the best approaches to “spreading the word” about avast!, but I suspect the costs may far outweigh the revenue returns, especially considering the current economic climate and the industry competition. Most people I know actually remove the OEM Anti-virus/Internet Security products and replace with FREE versions. We’ve conducted some research into user behaviour when it comes to “using AV” and most are not concerned with knowing “what it is doing”, but rather”it is doing “something” – protecting users from nasty malware and viruses. Another problem for OEM products is that (without naming names), some of them are resource hungry – which leads users to remove them. The next problem is removing the OEM AV – often files remain, even after uninstall leaving eroneous files which appear to affect computer performance. In summary, users appear to want AV that protect without hindering performance.

    We’ve been using avast! for some time now and because you developed it around Windows 95, it doesn’t affect everyday user activity i.e.web surfing, opening email applications etc. We also like the “boot scan” which adds another layer of security. I’m personally looking forward to the next version release.
    Best
    Julian

  35. Mark Story Jenks
    July 28th, 2009 at 22:00 | #40

    Thanks for one of the top ten products I’ve ever used.

  36. mingo
    August 2nd, 2009 at 22:29 | #41

    I would also like to express my gratitude to the developers of avast! – thank you for a great and functional product, wihch not only protects better than the rest from infections, but also updates itself(both the program and the virus definitions) automatically making it reliable for those not so familiar in using computer and SW.

    This automatic update of the actual SW is the reason why I will recommend(and often also install) the free version of avast! to anyone asking for my help in antivirus protection. Through this, I will help you guys in advertising your product, and in many cases even sell it after the one year of SUCCESFULL use of the free version.

    Keep up the good work, and I would be more than happy to hear you guys developing a free firewall SW (integrated in avast!or not) too =)

    BR
    mingo (FIN)

  37. Björn Lundahl
    August 4th, 2009 at 10:20 | #42

    In Avast we trust

    Hi, my daughter Elinor lives with her mother and I paid for a HP laptop which she and her mother bought. Norton was pre installed and Elinor activated it. This was about two weeks ago. Now she is visiting me for a few days. Norton is a security suite and the subscription lasts only for a few months. She wanted me to “fix” the PC, that is installing Avast Home Edition and uninstalling Norton and some crapware. I deactivated Windows Defender too. I also installed some very good freeware. When I uninstalled Norton it left Windows firewall opened. That is very bad. I guess Norton did not want to pay for the extra programming which it would cost them to let Norton close the firewall when it is uninstalled. I was aware to check the Windows firewall after uninstalling Norton, but not all people are. A Windows PC connected to the internet without a firewall is no good. It proves Symantecs mentality. Nothing to trust.

    Björn Lundahl
    Gothenburg, Sweden

  38. August 11th, 2009 at 19:58 | #43

    so, the most pre-installed security software is McAfee…

    i always remove all the others Av.. to put a good AV.. Avast!

    hmmm ¬¬ nobody sells avast on my country, Mexico…

    so i always use the free version.. and i bought avast for 3 years, but in another country (USA)

    im sure you don’t need to get avast preinstalled by OEMs your reputation makes you the most reliable security software

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