Trend Micro snatches Hotmail account from McAfee

Beating out McAfee, Trend Micro has landed a deal with Microsoft's MSN Hotmail service to do antivirus scanning for 187 million e-mail accounts.

Under the agreement, announced Monday, Trend's antivirus technology will scan inbound and outbound e-mail attachments for viruses, worms and Trojan horse programs. McAfee had provided antivirus scanning for MSN customers at least since 2000, when the company announced a 2-year agreement with Microsoft to protect Hotmail e-mail accounts.

McAfee was unable to respond to requests for comment in time for this story.

Trend is based in Tokyo and has U.S. headquarters in Cupertino, California. The company makes the PC-cillin desktop antivirus and content security products, including PC-cillin Internet Security, a suite of antivirus, firewall, antispam and content filtering products.

The company could not comment on the criteria MSN used to select its product for Hotmail, or on the size of the deal, citing instructions from Microsoft, according to Michael Sweeny, a Trend spokesman.

The speed of the antivirus product, its ability to scale up and service big deployments like MSN, and the speed with which antivirus updates are issued, are typically factors for large operations like MSN, and were strengths the company stressed to Microsoft, said Punit Minocha, senior director of business development at Trend.

Ease of integration between Trend's systems and back-end servers used by MSN for Hotmail was also an issue.

"Our engineers were out there in early discussions with Microsoft, and helped them resolve the issue. I think that had some bearing on the decision," Minocha said.

Trend's antivirus scanning engine will run on MSN's Hotmail servers, which will be tightly linked to Trend's virus definition update servers, to make sure that new virus definitions are dispatched as quickly as possible to Hotmail e-mail users, he said.

Trend has long been the number-three antivirus software provider, behind Symantec and McAfee. The company's products accounted for 14.2 percent of the worldwide revenue generated by antivirus software sales in 2003, according to research firm IDC

Sales to corporations have always been Trend's strong suit. The company's products accounted for 16.9 percent of the revenue generated by antivirus software sales to corporations in 2003. Symantec had 28.5 percent of that market, and McAfee 23.9 percent, in the same year. In comparison, Trend accounted for just 8.1 percent of revenue generated by antivirus software sales to consumers, compared with 12.8 percent for McAfee and a whopping 67.6 percent for Symantec in 2003, according to IDC.

The deal with MSN could boost Trend's share of the consumer antivirus market.

The deal will help expose millions of consumers to Trend's products and technology, according to a statement from Steve Chang, chairman and founder of Trend.

"We'll have our name posted (on MSN). Part of the benefit to us is that we can ... show off our technology in the antivirus space to consumers," Sweeny said.

Trend is already the top consumer antivirus product in Japan, but in the past the company has resisted going head-to-head with Symantec and McAfee in North America, Minocha said.

"Hopefully, (the deal with MSN) is a sign of more things to come in the U.S.," he said.

The announcement is also more bad news for McAfee, which lost ground in both the home and corporate antivirus market in 2003, mostly to Symantec and Trend. McAfee's worldwide antivirus software revenue declined 7.1 percent between 2002 and 2003, according to IDC. During the same period, Symantec's antivirus revenue jumped by 36 percent and Trend's by 22 percent, IDC said.

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