Antivirus software now a subscription situation

Annual charges now a usual thing, but unsubscribing's a bear

It took Michael Kelly just minutes to buy McAfee Inc.'s software. But getting the antivirus vendor to stop charging his credit card was another matter altogether.

McAfee is on the vanguard of a new trend in the security software industry: selling software as a service that is automatically billed each year. McAfee began automatically renewing customers in 2001, but over the past year the practice has become much more common, as Symantec Corp. and Microsoft Corp., with its new Windows Live OneCare products, have adopted the automatic renewals.

The vendors say that these programs are good for consumers. As many as two-thirds of antivirus users postpone their subscription renewal, leaving PCs unprotected from the latest attacks, they say. But as Kelly discovered after spending more than half an hour trying to drop his McAfee antivirus subscription, the automatic renewals have a downside too.

"The best practice has turned into the one that's best for the company and not for the customer," said Kelly, who blogged about his problems in early October. Kelly is chief executive officer of Techtel Corp., a market research firm in Emeryville, Calif.

Complaints like Kelly's may start piling up as more PC users become enrolled in automatic update programs. In early November 2005, Symantec Corp. began enrolling North American customers in automatic renewal by default, and it has now expanded the practice into Europe. By next year the program, called Ongoing Protection, will be worldwide, said Javed Hasan, senior director of product marketing with Symantec.

The vendors have taken steps to prevent their customers from being surprised by automatic renewals. Like Microsoft and McAfee, Symantec's sign-up forms make it clear that online customers are entering an automatic renewal program, and the vendors send a notification e-mail to customers before they place the new charges on their credit cards.

So far "the large majority of customers" are allowing Symantec to auto-renew their subscriptions, Hasan said. "We are very happy with the results that we're seeing now."

While automatic renewals can be convenient, they will make software license management more complicated for small businesses that are not cutting volume license deals, said Josh Kaplan, national marketing director for Rescuecom Corp., a computer services company in Syracuse, N.Y.

Companies will need to keep tabs on subscriptions to make sure that they are not charged subscription fees for PCs that are no longer in use, and the automatic renewals will inject some complexity into any efforts to switch security software vendors, he said.

Kaplan says that many of his customers have been caught unprepared for the switch to automatic renewals, although this is not necessarily a bad thing. "I have had customers who tell me that their antivirus is expired, and who are actually renewed," he said. "I haven't had any angry customers yet regarding that, but I've had quite a few surprised ones."

Online customers are being registered in these auto-renewal programs by default, though they won't be able to do this in some countries, where the practice is outlawed. Customers who purchase products at retail, or who have the security software pre-installed on their PC may not be entered into auto-renewal.

In North America, for example, there is no way for McAfee, Microsoft and Symantec customers to opt out of the program during the online sign-up process. But both McAfee and Symantec offer users a way to keep charges from automatically showing up on their credit cards one year later.

When Symantec customers sign up for security products the company sends them a link to a cancellation form they can complete to opt out of auto-renewals. In North America, McAfee customers can call 1-800-791-4577.

Things are not so simple with OneCare. Customers who have purchased the product online have only one way to opt out of automatic renewals: they can cancel their subscriptions altogether. To do this, customers must call OneCare's customer support number: 1-866-663-2273.

One year into Ongoing Protection, Symantec still has some bugs in the cancellation process.

Customers who don't save their initial e-mail with the link to the cancellation form are supposed to be able to drop the service on Symantec's customer account portal. But because of a glitch in the system, Symantec is now falsely notifying new customers that they "do not have any products or services with automatic renewal turned on," even though they are signed up for automatic renewals by default.

It takes about a month after purchase for the portal to register the fact that customers are enrolled in automatic renewals, a company spokeswoman said. "There's just a little bit of a lag time there, unfortunately."

The company expects to iron out this bug within the month, she added.

Selling software as a service is nothing new -- the industry has been slowly adopting this model for several years now -- but security software is a little different, said John Palfrey, executive director of Harvard's Berkman Center for Internet and Society. "Companies in this business have a special obligation not to violate the same rules that they are accusing others of violating," he said.

"I don't think any different rules should apply to a large antivirus provider than should apply to someone offering a free screen saver," he added.

Michael Kelly thinks renewing customers should be given the same kind price breaks that are commonly used to entice new customers, but despite his experience, he still likes the idea in principle. "The benefits are good, as long as they maintain good two-way communication and make it easy for you to cut it off."

Additional reporting by Narasu Rebbapragada.

Copyright © 2006 IDG Communications, Inc.

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