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Security vendors face new kid on block: Microsoft

Update for Windows XP includes security features such as a firewall, but antivirus firms say they aren't worried.

Security vendors face a new competitor with Microsoft's release of the Windows XP update, but they say the software giant's security features have yet to cause them concern.

The Service Pack 2 update, which includes a built-in firewall and pop-up blocker, falls short of offering the robust security features provided by a number of stand-alone security vendors, according to industry players. But some analysts note that the future is less secure, as Microsoft begins to bundle an increasing amount of security applications into the operating system.

"The gradual inclusion of firewall features is definitely a threat to the likes of McAfee and Zone Labs and other security vendors," said Stephen O'Grady, a senior analyst at RedMonk. "At this point, it's not a huge threat, because Microsoft isn't offering antivirus software--which is the bread-and-butter of McAfee and others. But is this a step Microsoft may take down the line? It could be."

Microsoft has offered few details about its antivirus ambitions. The company has said it is looking into an antivirus service, and it's reportedly also considering a stand-alone product.

Vendors who may be affected the most by Microsoft's XP update are companies like Zone Labs that primarily focus on firewalls, O'Grady said.

"They cut their teeth on firewalls, and although they recently started doing antivirus, for the most part, they are still a firewall company," he said.

Representatives from Zone Labs and McAfee, however, begged to differ.

"We've seen a lot of analysis, and (SP2) seems to help with only one type of vulnerability," said Fred Felman, marketing vice president at Zone Labs. "But it doesn't help with other security risks like hacker attacks...It's not very robust. And on the enterprise side, it lacks robust management tools."

SP2 features a basic integrated firewall that prevents possible points of entry, in addition to preventing applications from contacting the Internet, unless the user provides express permission to undertake the effort.

McAfee, known for its antivirus software, said it's not threatened by the security features in SP2 and anticipates that the update will lead to more consumers becoming familiar with its products over time.

"I think our firewall is much more robust and extends the functionality that is lacking in SP2," said Brent Lymer, a McAfee senior director. "When you have inbound and outbound messaging on the firewall, it bombards users (with notices). McAfee has pretrust applications, so it reduces the number of messages received and the likelihood a user will disallow an application that they should allow."

McAfee expects to benefit from the XP update, as users become inundated with warnings or calls for action from activity along the firewall. These users will come to realize the volume of activity that occurs at the firewall due to the messaging but may seek another firewall vendor, such as McAfee, to solve the security issue, Lymer noted.

Security vendors, however, applaud Microsoft's efforts to add a pop-up ad blocker.

"The cool thing in SP2 is that the browser helps users stop pop-up ads that might have evil links," Felman said.