Annual charges now the rule with AV software

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

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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, California.

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, New York.

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.