) bought security software maker Sybari Software, adding its offerings to a portfolio of technology that capitalizes on the burgeoning market for products to plug holes that Redmond's developers created.
Microsoft aims to be a major force in security software. It picked up privately held Sybari for an undisclosed amount, the goal being to beef up the protection of e-mail servers. Sybari's products make it easier to scan e-mail for attached viruses as it comes into corporate networks. Mike Nash, vice-president of Microsoft's security business and technology unit, says Sybari was acquired because customers asked the software giant to get into the business. "At the end of the day," Nash says, "we want to make sure our customers are more secure."
BUYING SPREE. Sybari is just the latest piece of Microsoft's growing portfolio of security software. It jumped into the market in September, 2003, when it bought GeCAD Software, a Romanian maker of consumer antivirus technology. Microsoft has been cagey about how it intends to use GeCAD's technology, though it seems likely that antivirus technology will be rolled out to work with the next version of Windows, code-named Longhorn, scheduled to debut at the end of 2006.
Microsoft added another piece in December, 2004, when it picked up antispyware specialist Giant Company Software. In January, Redmond rolled out a free test version of an antispyware tool using Giant's technology. Eventually, Microsoft may charge for the final version.
The software giant also has been working on a security subscription service that would likely include both technologies. However, it's still unclear when the service, code-named A1, would launch. Speculation has swirled that A1 will be unveiled at a security-software conference held in San Francisco Feb. 14-18, where Chairman Bill Gates will give a keynote speech. Microsoft declined to comment on that possibility.
SECURE BUNDLE. Unlike the GeCAD and Giant software that runs on PCs, Sybari's products are designed for computer servers. Sybari sells software that protects e-mail systems, letting customers choose from a handful of antivirus programs provided by other companies, such as Computer Associates (CA
). Microsoft intends to make the GeCAD technology available for the Sybari system. Its competitors include Symantec (SYMC
), McAfee (MFE
), and Trend Micro (TMIC
Microsoft's jump into security software has some rivals worried that the giant might use its market power to elbow them aside. Others say they're not worried -- at least not yet. But it is easy to imagine Microsoft bundling the technology inside Windows. Such a move would give it a huge distribution advantage over rivals, which often cut deals with computer makers to ship their software with new PCs.
While Microsoft doesn't have a monopoly in e-mail server software, it is a dominant force in the business, with its Exchange e-mail product accounting for more than 50% of the market, according to Goldman Sachs.
MATTER OF TRUST. Just as analysts expect Microsoft to offer antivirus software to consumers in Longhorn, they believe Sybari's software will be distributed through Exchange. "I would bank on their doing it," says Laura Koetzle, a Forrester Research analyst. "There is no reason to do this acquisition otherwise." Nash says Microsoft plans to sell Sybari's software as an Exchange add-on.
Even so, it's hardly a sure bet that corporate tech managers will want to use it. After all, Microsoft is no paragon of security. Many argue that the vulnerabilities in its products have led directly to today's scourge of viruses, worms, and other so-called malware. "Microsoft is not a trusted security vendor today," says Jeff Smith, CEO of security software maker Tumbleweed Communications (TMWD
). "They have a long way to go."
Maybe so, but Microsoft is betting that Sybari will get it there a bit faster. Greene is BusinessWeek's Seattle bureau chief