Interesting. This is bad news for Symantec, McAfee, and other virus software makers.
The software giant recently closed a deal that could help it dominate consumer antivirus software. On Sept. 3, Microsoft acquired the technology of GeCAD Software, a Romanian software maker, for an undisclosed sum. Analysts expect Microsoft to bundle GeCAD's software with the next iteration of Windows, due out in 2005. That could virtually eliminate competition in the consumer market for antivirus software now dominated by Symantec (SYMC ) Corp., Network Associates (NET ) Inc., and others. Says Laura Koetzle, a senior analyst at Forrester Research Inc.: "Microsoft will eventually monopolize the business."
There's more than a little irony in that. Critics have long blamed Microsoft for much of the virus epidemic, arguing that the company has worried less about security than about getting new products out the door. Vulnerabilities have made Windows and the Office word-processing and spreadsheet program favored hacker targets. If Microsoft wrote better software, critics say, the problem would largely go away. The prospect of Microsoft making money from its own shortcomings has prompted some cynical chatter in the industry. "The fear is of the fox guarding the henhouse," says Bruce Schneier, chief technology officer at Counterpane Internet Security Inc.
I don't think Microsoft will put competitors out of business, but they will definitely cause strategy changes among the industry's major players. This is one of the toughest business problems to deal with – when the basic economics of your industry change. Good companies, though, will find some way to offer value to customers. And anyway, I think many people won't trust the Microsoft anti-virus software (even if it is free with Windows).