McSolomon pot calls SymIBM kettle 'black'

Rob Rosenberger, Vmyths co-founder
Wednesday, 24 June 1998 McSOLOMON POT CALLS the SymIBM kettle "black": Symantec picked up IBM's antivirus products, technologies, and customer base last month. If you read the press releases generated by Network Associates & Solomon's, you'd think IBM committed suicide and bequeathed everything to a part-time shareware author. In reality, Symantec snagged a lucrative R&D program while IBM found someone to adopt their customers. Big Blue exited with honor, as any "Borland abortion" survivor will attest.

Network Associates has a history of bashing competitors who sell out to someone else (who can forget the Cheyenne incident?), so it didn't surprise anyone when they reached out to "stranded" IBM customers. But Solomon's? It seems out of character for them to strike first. I frowned when I read the headline on their website. Less than two weeks pass. Guess what? Solomon's sold out to Network Associates for $640 million! The snapshot at right — taken days after the sale — shows the hypocritical headlines on Solomon's website. You can also look at a snapshot of hypocritical headlines still on display at Network Associates. Anecdote: "McSolomon" named their competitors to various reporters without mentioning Symantec. SymCTO Enrique Salem laughed good-naturedly when I asked him about it. I laughed, too. It's pretty funny. Why did Solomon's sell out to Network Associates? A couple of reasons come to mind:

Symantec scored big with the IBM deal. They get access to a lucrative customer base of old mainframers who will ease into virus-plagued distributed networks. Solomon's & Network Associates lost a lot of access to those potential clients.
Symantec can implement IBM's "immune system technology" in their products. No other antivirus firm has unveiled an interesting R&D project to compete against it. I mean "interesting" from a marketing perspective, of course.
Network Associates CEO Bill Larson scored a hit with "product suites" covering the larger spectrum of computer security. Solomon's basically sells a line of antivirus products.

It probably made sense to sell right now for $640 million instead of selling next year for, say, $320 million. Solomon's can instantly promote itself as part of a suite; Network Associates gets instant European penetration.

It probably made sense to sell right now for $640 million instead of selling next year for, say, $320 million.

It sounds on the surface like a "win-win" situation, but the deal comes at an awkward moment for Network Associates. Quite frankly, I don't think CEO Bill Larson gave his company enough time to stabilize. Last year's merger with Network General created a lot of turmoil, particularly in the marketing force. Guys who don't understand the shareware concept suddenly had to sell "free" software — and folks who don't know AUI from RJ45 suddenly found themselves talking about routers. You can actually see some of the turmoil just by visiting Network Associates' website. They still say "formed by the merger of..." in press releases, for example. The verbatim title of their default home page right up to this month was "McAfee, Network General, PGP & Helix have merged to create a new company, Network Associates." "McSolomon" looks like a teenager in the throws^[1] of puberty if you ask me.
SOME INDUSTRY OBSERVERS believe the McSolomon/SymIBM deals mean "less choice" for the consumer. A few even say it'll damage the market for antivirus products. I reject these beliefs. If you think the market now "lacks choice," open your eyes! I can think of two small firms right off the top of my head with years of antivirus experience: Stiller Research (Integrity Master) and Rosenthal Engineering (Virus Simulator). Check out Yahoo!'s list of antivirus firms for more choices. "Less choice" meant something before shareware emerged as a marketing methodology. If you wanted to sell a product back then, you needed to find a company willing to (a) put it in a fancy box and (b) buy shelf space for it in retail stores. Shareware gave poor entrepreneurs the power to expose products to the masses. Any college student with a bright idea can compete against the big boys these days. Don't think a shareware author can handle the crush of commercial clients? Think again. Network Associates never abandoned their roots as a shareware firm. They broke shareware's eight-figure income barrier, they broke shareware's nine-figure income barrier, and I assume they'll break shareware's ten-figure income barrier. Nothing prevents a shareware author/firm from expanding to accommodate new clients. If shareware authors get too big for their britches, they can link up with a venture capitalist like John McAfee did — or simply sell out like Ross Greenberg did. So what if they get bought? Savvy firms woo shareware authors to enhance their product lines, not to stifle creativity. Mid-size competitors may suffer (or even fold) because of McSolomon/SymIBM, but these problems occur in any consolidating industry. I can confidently predict the deals won't adversely affect Stiller or Rosenthal. Indeed, they might snap up new clients searching for alternative products. More power to 'em! The shareware concept guarantees choice & innovation for antivirus products. Enough said.