Free anti-virus software dominates market

When Pavel Baudis wrote his original anti-virus software in 1988, he had no idea that 22 years later, his company (ALWIL software) would be servicing over one hundred million users. Co-founder and resident expert on malware and computer viruses, Baudis was inspired to write the software after he found a virus on a floppy disk. “Once I found the virus and analysed it, I had to wait half a year for the next one to surface”, he laughs. How times have changed.

“A lot of anti-virus vendors have routes back to the late ‘80s, early ‘90s. Problems started to surface, and naturally, so did solutions. Eugene Kaspersky emerged in the market shortly after us”, Baudis remembers. Whilst Kaspersky and ALWIL software (best known for producing Avast!) may have had similar beginnings, they have since taken very different routes.

So what’s the logic behind the free anti-virus model? “Of course, a small amount of our customers will upgrade to our paid premium product, but we value our free community extremely. They do our advertising and marketing for us”, explains CEO Steckler.

Why, then, would a consumer choose to pay for anti-virus when they can get it for free? “There is a natural inclination for people to believe that what you pay for will be better. People buy software because of marketing. We don’t take any capability away from our free version of our anti-virus software”, explains Steckler. “In fact, our free version 5 has more functionality than the paid Version 4 did. The last thing we want to do is alienate the free community when they do so much for us”.

The recession, surely, has something to do with the dramatic increase in Avast! users? In 2008, there were 70 million users, which increased to more than 100 million in 2009. “Well yes, the recession has influenced company growth, but more than that is realisation that free products are just as good, if not better, than paid for anti-virus”, Steckler says. What’s interesting is the company’s paid model achieved even bigger growth, with the user-base doubling in 2009. “It takes time to build up a critical mass”, explains Baudis.

Masters of auto-renewal

So if free products are just as good – “if not better” – than paid-for versions of the same protection, why are Symantec, McAfee, and other anti-virus vendors still selling so many products? “Because they are masters of auto renewal”, says Steckler. “They’re great at customer retention, but they’re not getting any new customers. They’re losing more old customers than they are gaining new ones”, he declares. In fact, he continues, “we have more users than the paid-for brands combined”.

Of course, there is still a genuine need for a more extended (paid) suite of internet protection, and that, Steckler explains, “comes when someone is doing their banking online. Then, they need a two-way firewall, a last ditch protection if all else fails. Free anti-virus is perfectly adequate, however, if someone is using their computer for email, social networking and browsing, etc.”

Curse of an import?

Founded and managed in Prague, Czech Republic, Baudis declares it “as good a place as any” to start an information security company. While ALWIL started by attracting only a local market, the company is now truly multi-national, with users in 238 countries and territories – 19 countries with more than one million users – and editions of the product in 38 different languages.

All 110 multi-national members of its staff are based in Prague, where “salaries are not as high”. While Baudis admits that they may have struggled to win over users due to their geographical founding, it’s not a problem “as everyone assumes we’re American. Funnily enough, we’re the biggest player in France”, he says.

While not willing to predict the future of the industry, Baudis was happy to confirm that the Avast! free business model would not change. “It’s becoming harder for the vendors who have paid products to survive, and they are trying to work out how to get into our business model. These established players have so much at risk”.

“We won’t be trying to get into their business model any time soon”, confirmed CEO Steckler.

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