Yankee Group Predicts Microsoft Vista Will Reshape the $3.6 Billion Windows Security Aftermarket; Users Will Experience Significant Security Improvements, but Enterprise Success Remains Uncertain

Business Wire, May 8, 2006

BOSTON -- Yankee Group today announced that the highly anticipated launch of Microsoft Vista in the first quarter of 2007 will dramatically alter the Windows security market, causing some segments to dry up while others will remain unaffected. As the first major update to the operating system in nearly 5 years, Microsoft Vista will improve security for its customers. However, the security improvements will disrupt the end users' experience and cause independent software vendors short-term pain.

According to Microsoft's Vista Won't Stop the Windows Security Aftermarket, a Yankee Group Report published in May 2006, the aftermarkets for anti-spyware and desktop firewalls will experience the most dramatic decline. On the other hand, Vista will have little to no effect on the size of the corporate anti-virus segment, although Yankee Group expects that the market shares of existing competitors will decrease slightly following the introduction of Microsoft's own anti-virus offerings. Deployment of Vista will also slightly decrease the need for third-party products for disk encryption, device control and certain host intrusion prevention software (HIPS).

"Overall, Microsoft Vista will bring spectacular improvements to the overall level of security for users, but only if Microsoft succeeds in making customers and ISVs comfortable with the new security system," said Andrew Jaquith, Yankee Group Security Solutions & Services program manager. "However, Windows security issues will continue to be a permanent fact of life for Microsoft, which means that third parties will always have a rich and robust aftermarket available to them to serve."

Due to the usability challenges that customers will face with Vista, Yankee Group also finds that widespread adoption of the new operating system will be slower than Microsoft's estimate of 400 million desktops in 24 months. In addition, Yankee Group expects that many customers will defer major upgrades because of the expense of upgrading end-user desktops, and because Microsoft will market security as a "feature" that users must pay for to obtain.

NOTE TO EDITORS

For interviews contact:

-- Andrew Jaquith, Yankee Group, 617-880-0351, ajaquith@yankeegroup.com

-- Christina Oh, Yankee Group, 617-880-0238, coh@yankeegroup.com

YANKEE GROUP (www.yankeegroup.com)

Yankee Group is the expert in navigating the global connectivity revolution. For more than 35 years, Yankee Group's strategic vision, research and analysis, quantified market intelligence and credible advice have been guiding innovation and empowering our clients to make critical business decisions. Yankee Group is headquartered in Boston with presence throughout North America, Europe, the Middle East, Africa, Latin America and Asia-Pacific.