Standing Guard on Software's Next Frontier

Yankee Group also anticipates that Vista will "significantly shrink" the market for desktop firewalls and might decrease the need for third-party products for disk encryption, device control and some types of host-intrusion-prevention software.

However, the technology behemoth still has some usability issues to confront before it threatens to wipe out the competition.

Vista's user-account controls will be annoying to users, Jaquith says. Rather than having smart default settings, the program constantly throws security dialogue at users, he points out -- so many will likely resort to "slapping it like an alarm clock in the morning."

The company also insists on using ActiveX embedded-file technology, which continues to be a security problem, Jaquith says. He doubts Microsoft will reach its goal of selling 400 million Vista systems in 24 months, as companies will wait to upgrade until Vista's short-term execution challenges are worked out.

"Microsoft needs Vista to be a hit," he notes. "If it's a winner, it's definitely going to boost their stock."

But more likely is the following scenario: "When you combine the fact that it is a little late with it, that the security features are going to be problematic in the short-term, and in order to run it, most people are going to have to upgrade their hardware, these three factors suggest a more moderate uptick (in the stock price) than Microsoft is hoping," he says.

>To order reprints of this article, click here: Reprints