Security fears hit Microsoft sales figures

Microsoft has admitted that its sales have been affected by customer concerns over IT security.

The company's share price fell last week when the software giant said the signing of a number of contracts had been delayed.

'Security concerns after a few very high profile attacks in the latter half of the quarter diverted the focus of our customers, our sales force, and the channel away from closing new deals and renewals,' a Microsoft spokesman told Computing.

John Pescatore, vice president of internet security at analyst Gartner, says some companies are waiting for vulnerabilities to be identified.

'We saw this in 2001 with Code Red and Nimda, and we are seeing it again now,' he said. 'This year it's Blaster and SoBig and so on, most of which have been against Microsoft software. Companies are thinking maybe they should wait this out.'

Beatrice Rogers, ebusiness programme manager at industry body Intellect is not surprised users are uneasy.

'This is still a very hard market and it has to be expected. People are being more cautious,' she said.

But Ashim Pal, vice president at analyst Meta Group, says the deferred contracts are 'a drop in a bucket' to Microsoft.

'This is one bad data point that happened at a particularly bad moment for Microsoft,' he said.