Microsoft's announcement of its imminent entry into the personal firewall market was expected, but it is still concerning for some companies already playing in that space. However, in some ways the product seems to be focused on improving Microsoft's security reputation rather than making a splash in the market.

Microsoft has been flagging up the advanced firewall features of Windows XP Service Pack 2 for some time, and now it has revealed some of the Windows Firewall features that will be turned on by default in the forthcoming release.

It does, however, come closer to resembling some of the popular personal firewall products on the market today by giving some level of control over outbound application traffic - unlike the previous version of Windows Firewall, Internet Connection Firewall, which was a basic stateful inspection filter.

Companies in the client security market do not believe the new Microsoft software provides the same level of protection their current products do, although they acknowledge that Microsoft entering their marketplace is bound to be concerning.

Rivals also claim that security systems from specialist vendors are preferred to products with built-in security countermeasures. On the other hand, Microsoft's "leverage Windows" strategy worked very effectively pushing out Netscape during the browser wars, and is now giving RealNetworks (RNWK) a run for its money in the streaming media wars.

In the end, Windows Firewall appears to be mainly a defensive, rather than competitive, move. The company recently admitted that it is losing out on hundreds of millions of dollars in software sales, partly attributable to its poor record on security.

Microsoft putting security software into Windows - essentially selling the problem and solution in the same box - also implies that the company does not believe security threats against Windows are going away any time soon.

Source: ComputerWire/Datamonitor

Related research: Datamonitor: "Beyond the perimeter firewall" (BFTC0814)