After Google buys Postini, what next for MessageLabs?
Google's acquisition of Postini (see Techmeme for more discussion) throws a spotlight on an often overlooked SaaS category. Message filtering is one of those functions that really makes little sense done on-premise. Email is in the Internet anyway, and part of the point of filtering it is to stop malicious code getting inside your firewall, so doing it online is the most logical approach. On top of that it taps into the shared-services meme of on-demand SaaS, because the service provider can pool intelligence about malicious messages and suspect message senders across the millions of messages being processed.
No wonder then that the top vendors in the space have been on-demand vendors. Now that Postini has been aquired, another trend becomes visible; they're all getting snapped up. The other major US player, formerly Frontbridge Technologies, was acquired by Microsoft in August 2005 and the Frontbridge products now go by the name of Exchange Hosted Services. Among smaller players, the UK-based BlackSpider was acquired last year by Surf Control, which itself is currently being acquired by WebSense. A smaller US player that remains independent is MX Logic.
But there were really only three big on-demand players in the space. Now that the other two have gone, the one left standing is UK-based MessageLabs, which last year reported revenues of £49 million (about $100 million). I've been citing MessageLabs recently in my appearances at European SaaS conferences as probably Europe's biggest SaaS vendor. It claims 13,000 businesses and 5 million users, compared to Postini's 35,000 business and 10 million users.
Now that Microsoft and Google have made their moves, it's not immediately obvious who else would want to acquire MessageLabs. There are no other email providers making a serious pitch for the enterprise market (excluding smaller players like Zimbra). Perhaps one of the security companies might make a move, although they would probably want to believe they already own adequate technology of their own. If MessageLabs remains independent, it might be no bad thing. Postini benefited after Microsoft's acquisition of Frontbridge from a migration of customers who wanted to stay with an independent provider. MessageLabs may get a similar boost from Google's purchase of Postini.