Implemented an idea poorly does not make it a bad idea.
Splits a sentence in the middle and starts a whole new paragraph with the second fragment!
"The problem is, how can you trust it (or other "solutions") to be free from malware?"
Yes. That is the problem with Windows regardless of where you get it from. I'll go one step further and say that you can just assume it already has malware. Windows Genuine Disadvantage anyone?
"What is this third kind of software that is neither open source nor proprietary which is bringing down the average industry standard for software quality?"
As far as exceeding industry standards you are confusing a standard with a mean. For example, the industry standard size for a byte is 8 bits. If your bytes have 9 bits in the software you design then you have exceeded industry standards
" I'm head IT manager "
That is beyond a shadow of a doubt one of the biggest problems your company has right now.