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Webroot Software, the reigning king of anti-spyware, is facing challenges to its supremacy, as Microsoft, Symantec, McAfee and others begin offering competitive solutions bundled into suites and packages with a seemingly impenetrable install base.

But the software company is banking on its channel partners to maintain and grow its installed base in the enterprise and consumer markets as the company fends off competition and eventually strives for a fuller portfolio, perhaps even a bundle of its own, executives told ChannelInsider.

“The channel is the centerpiece of our strategy,” said David Moll, Webroot’s CEO.

“Spyware at an enterprise isn’t about fighting pop-ups and stolen home pages,” he said. “It’s about Trojans and keystroke logins, a new breed of threats that puts corporate data at risk. In that element, a best-of-breed solution continues to be the orientation of the market, and in that sense a company like Webroot and the trusted advisor nature of VARs align with the needs of the market.”

Pointer Click here to read the allegations of Tangent, an OEM and Microsoft partner, that claims Microsoft used its market dominance to overcharge OEMs, distributors and resellers.

Webroot is hoping to avoid the fate of Netscape and RealNeworks, vendors who were virtually shut out of their markets when Microsoft bundled alternatives to their products with previous releases of its Windows operating system.

The Boulder, Colo., vendor is counting on its channel to keep accounts and grab new ones beyond the bundle barricade presented by Microsoft’s Vista release, which is expected to include an anti-spyware application of its own. Anti-virus software giants Symantec and McAfee are also expected to include anti-spyware applications in upcoming releases.

Webroot launched a formal channel program, Channel Edge, in February with 320 partners and has since grown channel sales 62 percent to nearly two-thirds of revenue, the company reported.

The company is investing in channel programs—Market Development Funds, margins and account managers—and recruiting partners, hoping to eventually push more than 90 percent of its revenue through indirect sales.

Webroot is also working with a handful of OEMs and system builders, but most of its channel energy is being focused on VARs, Moll said.

Webroot offers its premium partners, now 70 strong, the Enterprise Spy Audit tool to evaluate a customer’s level of spyware risk, a key presales aid and a platform for security services.

But analysts said a strong channel alone would not keep a one-application vendor in business much longer.

“They have to have more to sell than just anti-spyware,” said John Pescatore, an Internet security and intrusion protection analyst at Gartner. “There will not be a stand-alone anti-spyware market beyond 2008.” By 2008 Vista will begin to impact enterprise systems and will begin shutting out single-application competitors such as Webroot.

Not willing to let its destiny rest on a solitary function, Webroot is working on expanding its product portfolio, Moll said.

Moll would not say whether the portfolio expansion will be organic or by acquisition, but the privately held company raised an estimated $108 million in venture capital funding last year for growth.

“In the long term, we know we won’t grow as single-product company forever,” he said. “We understand that fact, and in the long run we are oriented on being substantially larger than we are today. There has been a lot of work around expanding our product portfolio.
“We expect to grow by adding partners, growing alongside partners we’ve chosen. And offering more opportunity to sell differentiated products.”