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AUGUST 14, 2003
By Alex Salkever Microsoft, Your PC's Security Guard? [Page 2 of 2] PART OF .NET? That's hardly a new concern. Access to Windows' so-called kernel code has fueled numerous disputes between Redmond and software companies that build applications for Windows. But the security sector has become so important in protecting the overall structure of the Internet that the kernel issue could prove a much hotter button here. Further, access to operating system's guts is even more important to building security software that can protect Windows machines because a broad overview of the processing going on inside an operating system affords the best vantage point for securing it. Gates & Co. also enjoy a distribution advantage. Microsoft could easily build security software as an offering into the .Net subscriber package of Web-based computing services. .Net is Microsoft's grand plan to get Web surfers to entrust all sorts of online services to it, from managing digital wallets to tracking software updates. Microsoft could piggyback sales and marketing of security software atop its other consumer efforts. It also has a track record of pushing PC makers to offer Microsoft-branded services and software prominently on default screens. FRIGHTENING SIGHT. At the very least, Microsoft would prove stiff competition and possibly accelerate an ongoing consolidation among the dozens of players clawing for market share. Symantec now has the largest share of the consumer desktop-security market and, therefore, probably has the most to lose. Symantec officials declined to comment for this story. Any serious effort by Redmond could also scare off startups and choke innovation, say some critics. "It would be too bad if all the venture capitalists pulled out of desktop security because of a Microsoft threat," says Gregor Freund, CEO of desktop software firewall concern Zone Labs, whose interest in keeping the giant out of the industry is obvious. Freund further worries that if Redmond could also corner the market in security software -- hardly a given, even for Microsoft -- it would create another software monoculture, this time in an area of increasing importance. "If we not only used Windows and Office but also Microsoft security products, it means we have a single point of failure," says Freund. RAPID-RESPONSE UNIT. He doesn't see the trials as a sign that Microsoft is ready to enter the market. Freund thinks that won't happen for at least 18 months or perhaps longer. He points out that while building a product gets you to the starting line, to remain competitive Microsoft would still have its work cut out for it. For example, it would have to build a continuous update capability akin to those of other desktop-security companies. This is more intense than the software patching capability Microsoft now has. It would have to build and maintain a crack SWAT team to keep updating virus and attack "signatures" -- the digital fingerprints of each virus that antivirus and firewall programs store and check against incoming data. And it would have to make sure that those signatures fly out the door mere hours after a new attack shows up. That's different than building software patches, which are usually released days after a vulnerability is announced or after Microsoft is able to work with the bug finders to build a fix before the hole goes public. LOW-HANGING FRUIT. Nevertheless, in the past only a handful of software companies have managed to compete effectively when Microsoft moves into their sector. And in those cases, for the most part Gates & Co. faced a dominant incumbent, such as Intuit (INTU ) in personal-finance software. The desktop-security market remains widely fragmented, with no one company holding more than 32% of either the firewall or antivirus market. As Microsoft casts a wide net to find new sources of revenues, security software seems like a low-hanging fruit -- and one it appears set to take a bite out of in the not-so distant future. After all, someone has to protect users against all the holes in Microsoft's software.
 Salkever is Technology editor for BusinessWeek Online and covers computer security issues weekly in his Security Net column
BW MALL
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