Third buy's a charm for Microsoft security?

Purchase of Sybari Software could position Microsoft as a player in the corporate security market--if it gets its product strategy right.

Microsoft's idea to purchase Sybari Software came from a place where many of its ideas are born--its labs.

Late last year, the software giant wanted to build on an important technology--the RAV antivirus software that it acquired from Romania-based GeCad--to take it beyond a desktop virus scanner to a security product for businesses. Rather than develop the extra software needed, the company looked to partners. Sybari's Antigen scanner for Microsoft Exchange e-mail and SharePoint collaboration servers seemed an obvious fit, because Microsoft's customers were already using it.

But as the development progressed in the labs, it became even more obvious that Sybari's product would make just as good an addition to the whole of Microsoft's security lineup, said Mike Nash, head of the company's security business and technology unit.

"Microsoft has come, as a company, to really believe in using what we sell and selling what we use," Nash said. "One company that we have used a lot is Sybari."

Signed and sealed

Microsoft has bought up key companies with an eye to offering security add-ons for Windows systems and company networks.

Sybari Software
Company: Based East Northport, N.Y. Privately held
Products: Software to filter viruses and spam on networks. Antivirus engine not included
Deal: Acquisition, pending regulatory approval
Date: February 2005
Plans: Antivirus and antispam tool for e-mail and collaboration servers
Giant Company Software
Company: Based in New York. Privately owned
Products: Software to combat spyware, pop-ups and spam
Deal: Acquisition, now a subsidiary
Date: December 2004
Plans: An anti-spyware product (in beta) for desktop Windows
Company: Based Bucharest, Romania. Privately held, with 100 staff
Products: RAV antivirus engine
Deal: Sale of technology and intellectual property
Date: June 2003
Plans: Paid antivirus add-on for Windows; to integrate with Sybari software

On Tuesday, that seed culminated in the announcement that Microsoft will buy Sybari. It's the company's third security-focused deal in 18 months, and a sign that the company is getting serious about security. First, Microsoft silenced some gibes about the safety of its own products with its Trustworthy Computing push. Now, with the acquisitions, it has moved into position to become a player in the corporate security market.

Sybari slots in the final piece needed for Microsoft to create a software and services package to combat e-mail threats such as viruses, spam and spyware, said John Pescatore, an Internet security analyst at market research firm Gartner.

"They have all the pieces together now, but it is going to take a couple of years before companies will consider the offerings," Pescatore said.

With the purchase of GeCad in 2003, Microsoft picked up the technology and staff to develop an antivirus "engine," or core software that recognizes malicious code. When it picked up Giant Company Software in December 2004, it gained a network for gathering threat reports and anti-spyware programs for the desktop.

Sybari's Antigen software allows Microsoft's GeCad-based antivirus engine, and similar competing software, to be used to scan incoming e-mail and instant messages before they enter a company's network.

"Microsoft has already said that they plan to offer a service in the antivirus space," Pescatore said. "This gives them the ability to offer the product to enterprises."

The earlier deals gave Microsoft technology that it could fold into its core Windows operating system and Office products. But the Sybari

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