Standing Guard on Software's Next Frontier

A new report suggests that security software heavyweights like McAfee (MFE) and Symantec (SYMC) can take pleasure in the looming debut of Microsoft's (MSFT) Vista operating system.

But smaller third-party software vendors may have a bumpy road ahead.

"There's been this little problem with security on the Windows platform forever," says Andrew Jaquith, a security industry analyst with the Yankee Group, and author of the report. One of the key goals for Vista -- the company's first major update to its OS in five years -- is to increase security, to "make it less of what it has been, which is a breeding ground for malware, spyware and other problems."

Jaquith explains that the measures Microsoft has implemented will definitely increase security in the platform. Among other capabilities, it will be armed with a two-way firewall, antispyware and antiphishing features, including a color-coded toolbar in Internet Explorer 7 that will indicate whether a site is safe for surfing or potentially malicious.

But perhaps in order to avoid unwanted scrutiny from regulators, the company did not put antivirus capabilities in Vista, Jaquith says, so incumbent vendors -- Symantec, McAfee, CA (CA), Trend Micro (TMIC) and Panda Software -- won't see their businesses dramatically affected.

These companies have the advantage of having customers who have worked with them a long time, they are established companies in the market and they can manage large enterprises effectively, he says.

Still, Microsoft's own antivirus products, OneCare Live for consumers and Client Protection for the enterprise, may hurt the market share of these competitors somewhat.

Antivirus is a $2.6 billion market -- the largest part of the total $3.6 billion aftermarket for security, according to Yankee Group numbers.

On the other hand, companies with specific stand-alone products that overlap somewhat with Vista "are going to take a hit," he says. For instance, it will be hard for antispyware purveyors like Lavasoft and Webroot to compete with the free antispyware tools in Vista.