Thursday, June 11, 2009

HP to sell Symantec backup service on consumer PCs by Reuters: Yahoo! Tech

Why is Symantec partnering with HP for their online backup service?

In the consumer security market it is all about getting your product onto the PC before the consumer buys it. So it is essential for a consumer security company like Symantec to partner with the laptop and desktop manufacturers like HP. It also explains why McAfee is hoping to woo the contract away from Symantec.

The typical consumer does not read any of the product comparisons that are filling the pages of for example PC magazine and their web sites, instead they only buy a product at the same time they buy their PC or laptop. The added benefit is that they don't have to worry about installing the product. Also, consumers more and more are used to getting software and services for free via the Internet and now with the recession it is even less likely that they would pay for a product.

The consumer security companies like Symantec, McAfee, Trend Micro,and Kasperky labs, have known this for a long time, so all of them are eager to make sure their product or service is on the PC or laptop at the time the consumer buys it. It is at that time that a consumer is most "vunerable"; they just spend close to a thousand dollar on a brand new PC so what is $50 more to protect your files?

So typically each of these companies will make deals with all the desktop/laptop manufactures such as HP, IBM, and Lenovo to get them to pre-install their product in such a way that when the consumer turns on their PC for the first time, the product is activated and runs for a few months free of charge.

The conversion rate (percentage of consumers who will switch to a paid version after the free trial ends) is dropping for several reasons: first of all consumers feel safer these days from Internet threats and secondly they are trying to save money (we are in a recession).

And this brings us to the real reason why Symantec is partnering with HP on their online backup offer; once the free trial runs out, Symantec will inform their users that all of their files are safely backed up on the Symantec cloud, but if they do not switch to the paid version then all of their backups will be removed and their files will no longer be protected. That makes for a tough choice for the consumer: pay $50 or loose all your backups. In other words online backup is very sticky!

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