Opening the annual RSA Conference yesterday, Microsoft chief software architect Bill Gates said that a beta of IE 7.0 will be available by early summer for download on machines running Windows XP Service Pack 2.

Microsoft was expected to stop making IE available as a separate product, with plans for the next release to be integral part of the delayed Longhorn operating system.

Gates told RSA delegates in San Francisco that Microsoft decided to do a new version of IE offering new levels of security with advances against phishing and related malware.

Browsing is a point of vulnerability, he said, conceding that IE is still a weak point in systems security.

Gates said he believes advances in spam filtering, combined with Microsoft’s work with officials, means the tide of spam has passed its peak. The same, Gates said, cannot be said of phishing, which is on the rise and which Gates called the industry’s fastest growing challenge.

[Phishing] remains a big problem. At the software level we can block tricks and need the same techniques we use with spyware – a database to track the bad sites, he said referring to Microsoft’s current anti-spyware beta.

Microsoft plans to give away the anti-spyware software, acquired when it bough Giant Company Software Inc In December, with Windows. Gates said: We decided all our Windows licenses should have that [anti-spyware] capability. We have the capability and it addresses a burning need for our users.

Meanwhile, Microsoft plans a consumer-focused service to simplify server updates: a beta of AutoUpdate will begin next month, and provide a single update system for all Windows servers. AutoUpdate will complement existing Windows update services used by enterprise customers.

For developers, Microsoft’s Visual Studio IDE will enable programmers to build .NET applications and web services capable of automatically connecting and disconnection via IPSec.

Gates also highlighted Microsoft’s past and present work in the Service Pack (SPs) arena, to secure Windows. Windows XP SP 2, released last year and which includes a pop-up blocker, anti-spoofing and zone control, has been downloaded by170 million people, Gates said. Meanwhile, Windows Server 2003 SP 1, features digital ID management to certify users roles across machines.

Finally, Gates announced the release to manufacturing of ISA Sever 2004 Enterprise Edition, due for availability in March. Features included centralized management of firewall policies, use of network load balancing to increases application uptime and performance, and monitoring and storage via Active Directory.

Gates said ISA Server 2004 helped provide perimeter isolation a key element of an overall security strategy.