Microsoft to buy antivirus company

Microsoft said Tuesday that it is buying Sybari Software, an antivirus and antispam software company. Terms of the deal were not disclosed.

Microsoft intends to use the acquisition to provide its corporate customers with technology to protect themselves against malicious software, according to a company statement. The acquisition is Microsoft's first in the antivirus market since the company purchased technology from GeCAD Software Srl of Bucharest, Romania, in June 2003. It also comes amid expectations among industry insiders that company Chairman and Chief Software Architect Bill Gates will use a keynote speech at next week's RSA Security Conference in San Francisco to announce plans for a consumer antivirus product.

Sybari, of New York, makes antivirus, antispam and e-mail content filtering products for big companies. Sybari's Antigen antivirus product is a server-based product that uses multiple antivirus engines to scan e-mail messages for viruses.

Microsoft began negotiating with Sybari, a private company, around one month ago, said Mike Nash, vice president of Microsoft's Security Business and Technology Unit. Sybari was considering an initial public offering before Microsoft agreed to buy it. Microsoft was prompted by customer demand for more antivirus protection on Exchange servers, Nash said.

Sybari gives customers a choice of antivirus engines from companies such as Sophos, Computer Associates and Kaspersky Labs, but the company does not have its own antivirus engine. Sybari works with Microsoft Exchange e-mail server, as well as Microsoft Office SharePoint Portal Server 2003 and Microsoft Windows SharePoint Services, which are used to manage and share documents and information across an organization.

The purchase is not surprising, considering Sybari's strength on Microsoft Exchange and the two companies' close business ties, said Brian Burke, an analyst at market-research company IDC. In fact, Microsoft commonly recommended Sybari to customers looking for an antivirus product that works with Exchange, Burke said.

Sybari's use of other companies' engines also stays true to Microsoft promises to avoid domination of the antivirus software market and play fair with other antivirus companies, Burke said.

In a statement, Microsoft tried to ease concerns that Sybari would become an Exchange-only product, saying that it will continue to support multiple versions of Sybari's software for Exchange and Lotus Notes.

However, Microsoft said that it does plan to add its own antivirus engine, which it acquired from GeCAD, to the list of those that run on Antigen. That could spell trouble for Sybari's antivirus engine partners, Burke said.

Nash said that internally, Microsoft has already been using the GeCAD engine, now referred to as the "Microsoft antivirus engine," with the Sybari technology.

Nash, however, did not say whether Microsoft would use its antivirus engine as the default scanning engine for Sybari, or continue to be agnostic about which engines customers use.

Microsoft and Sybari were still working out the details of the acquisition and hadn't decided how customers would be able to choose among the scanning engines. However, Sybari's current business model, which allows choice, is a "good one," and Microsoft wants to "start from there," Nash said.

Nash reiterated Microsoft's intention to maintain good relations with other antivirus providers and said that customers want and benefit from a choice of companies. However, many of the company's customers want Microsoft to provide antivirus software, and the Sybari acquisition is an attempt to respond to those requests, he said.

The company is also considering ways to integrate Sybari's antispam software with antispam technology that Microsoft already uses for its Hotmail e-mail service, MSN network and Exchange, Nash said.

Sybari's Chief Executive Officer Robert Wallace said, in a statement, that he welcomed the addition of Microsoft's expertise and the opportunity to offer Sybari technology to more businesses.

After the acquisition is complete, Microsoft will maintain Sybari's current research and development facility in East Northport, but may merge some of the company's sales offices with other Microsoft facilities, Nash said.

Microsoft has been adding to its stable of security software in recent months. In December, the company announced it was buying Giant Company Software. The company later released a free test version of Giant's product, Giant Antispyware, under the name Microsoft Antispyware.

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