Is Microsoft's AntiVirus Strategy Secure?

The Redmond software giant is going where only crackers and virus writers have gone before. With two new spam and virus fighting applications, Microsoft hopes to make right what has gone wrong with its code.

Microsoft's business strategy has been intensely scrutinized for decades.

So when the company last month bought a small maker of anti-spyware technology, the move was widely interpreted as a foreshadowing of its entry into the security software market. That prediction was borne out with the Jan. 6 debut of a Microsoft-branded spyware-fighting tool and the subsequent release last week of anti-virus software.

While Microsoft has downplayed the significance of the new products, observers say it's a classic strategic move for the company, and is part of a looming overhaul of the two markets. How the giant company chooses to distribute the software will determine whether it again arouses the interest of the Department of Justice.

Behind Microsoft's entrance into the thriving market for antivirus software is the rush of viruses that regularly rain down on PCs. In the month of December alone, 390 computer viruses were on the loose among the computing community, according to a tally by WildList Organization International, which collects reports from anti-virus experts throughout the world.

Perhaps no company name is as closely associated with the spread of viruses as that of Microsoft, whose programming vulnerabilities in Windows and Internet Explorer are the entry points for many viruses and worms. While the company's entry into the market has been ruminated over for years, the pressure of external forces has stepped up the squeeze on the company to act.

Last fall, Firefox, the open-source browser by the Mozilla Foundation, had a surprisingly successful debut. In just one month after its release, Firefox saw its share of U.S. browser usage grow from 3.03 to 4.06 percent, according to WebSiteStory, a San Diego consulting firm. Microsoft's inveterate Internet Explorer slid 1.09 percent, to 91.8; since last June, IE has dropped 3.68 percent.

Equally important, evidence continues to mount about the toll that viruses are taking on corporations, a key market in which Redmond has long sought to boost its credibility and appeal. In the Computer Security Institute's 2004 CSI/FBI Computer Crime and Security Survey, virus outbreaks emerged for the first time as the incident type generating the largest culprit for corporate losses, edging out theft of proprietary information, which had been the most expensive category of loss for five years. 

Microsoft's appearance in the antivirus software market was inevitable as the company seeks to stem defections to rival operating systems and lure new corporate accounts.

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"The more problems people have with the security of Windows, the more likely they are to switch to Linux or the Mac, and certainly large corporate users who are worried about security could stay with Unix," says Michael Cusumano, professor at MIT's Sloan School of Management and author of The Business of Software.

As a result, says Cusumano, branching into security software "is something Microsoft has to do. I'm not sure they have a lot of choice."