TECH SPECIAL REPORT Why Hackers Are a Giant Threat to Microsoft's Future Bill
Gates and Steve Ballmer dithered while viruses and worms cost customers
billions. Now Microsoft is scrambling to put things right.
By Fred Vogelstein
Nobody in charge at Microsoft
is likely to forget the dog days of August 2003. That month viruses and
worms aimed at flaws in Windows software brought the Internet to its
knees. Hard drives flooded with gibberish, computers and servers
crashed, bogus e-mails proliferated, and for weeks, users fumed. The
attacks snarled the transcontinental flow of freight on CSX Corp.'s
railroads. They shut down the Maryland Department of Motor Vehicles for
a day. Air Canada lost the ability to make reservations.
And Microsoft caught the heat. MICROSOFT WINDOWS: INSECURE BY DESIGN, said the Washington Post. A TEST OF MICROSOFT'S TRUST, said the Business Times of Singapore. OH, MY ACHING SOFTWARE, said the Seattle Post-Intelligencer.
One worm, known as Blaster, didn't just mess up your computer, it
embedded this message deep in the machine's software: "Billy Gates, why
do you make this possible? Stop making money and fix your software."
The
attacks marked a watershed for the software giant. Not only was
Microsoft savaged in the media, but also it got socked in the
pocketbook. When the company reported earnings on Oct. 23, analysts
were surprised to hear CFO John Connors note that major corporate
customers had put off signing deals to the tune of hundreds of millions
of dollars. Investors hammered the stock, sending it down 14% in a
matter of days.
This August, Microsoft unveiled a response to
the hacker threat: a $1-billion-plus, 100-megabyte revision of its
Windows XP operating system. The geekily named Service Pack 2, which
customers can download for free, fixes thousands of weaknesses and
flaws in Windows XP that hackers could otherwise attack. It represents
the first meaningful improvement in the security of the software that
sits on...
