Major antivirus suppliers responded with guarded optimism to Microsoft's announcement that it will buy antivirus technology from Romania's GeCAD Software and offer its own antivirus products.
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The five biggest antivirus software suppliers, Symantec, Network Associates, Trend Micro, Computer Associates and Sophos, see Microsoft's move as an acknowledgement that fighting viruses is a key part of cybersecurity.
However, the suppliers also stressed that using antivirus technology alone is not enough to be safe online.
If Microsoft were to become a major player in the basic antivirus space, the suppliers would be in the game of selling crucial additional software and services such as intrusion detection, firewall and security management applications.
"We still need to understand the full implications of this," said Genevieve Haldeman, spokeswoman for market leader Symantec.
"We believe that customers are going to continue to look to independent security companies to provide comprehensive threat protection for Microsoft's as well as other popular operating environments."
Computer Associates said Microsoft has taken "the next evolutionary step in the world of plain antivirus", said Ian Hameroff, a security strategist at Computer Associates.
However, antivirus is just one piece of a total security strategy and Computer Associates sells the other pieces.
Although Microsoft will now become a competitor, the software maker is also an important partner for antivirus software suppliers. Access to Microsoft APIs (application program interfaces) is key to making virus traps work well.
"We still see Microsoft as collaborators," said Network Associates president Gene Hodges.
Cutting off access to APIs would backfire on Microsoft as it would result in hordes of angry customers, Hodges said.
"I don't think Microsoft would do that. I expect Microsoft to work in its self interest and its self interest would be to give access to other suppliers," he said.
Trend Micro said Microsoft's acquisition of GeCAD's technology is a necessary part of Microsoft's Trustworthy Computing initiative.
Bundling antivirus software with Windows could change the competitive landscape dramatically and even sideline antivirus suppliers in a Netscape-like scenario. Netscape is the web browser that fizzled when Microsoft bundled Internet Explorer with Windows.
"The situation might change if they bundle it [antivirus software] with Windows," Network Associates' Hodges said.
Microsoft said it would not offer antivirus software for free as part of Windows or any other product.
Several analysts said Microsoft has a major technology advantage in building antivirus software for its own products.
"Microsoft will be a competitor with a strong advantage," said Jan Sundgren, an analyst with Forrester Research.
"They could bundle it and if it just comes along for free, customers will look at it first before buying another product," he added.
The worldwide antivirus software market hit $1.1bn (£666m) in 2001 in terms of revenue and is growing steadily with a predicted compound annual growth rate of 11% to hit $1.8bn (£1.1bn) in 2006, according to research firm Gartner.
With its products and operating systems the frequent target of virus writers, Microsoft is devoting an increasing amount of attention to antivirus technology in recent months.
In May, the company joined with Network Associates and Trend Micro to form the Virus Information Alliance in an effort to keep users better informed about virus threats to Microsoft products.
Microsoft also developed a virus scanning API for its upcoming Exchange 2003 e-mail server.
Joris Evers and Paul Roberts write for IDG News Service