Google purchases Postini (and crosswind landings)

Tis tendacious Tuesday's IT Blogwatch: in which Google buys Postini for $625 million. Not to mention more buttock-clenching crosswind landings than you can shake a stick at...

Todd R. Weiss has the scoop:

Now you can add high-tech online security to the list of enterprise-ready features in Google Inc.'s online hosted Google Apps office productivity suite. In a move designed to make the use of Google Apps more appealing and secure for large business users, the company today announced plans to acquire messaging security and compliance vendor Postini Inc. in a deal worth $625 million.


Postini offers services such as message security, archiving, encryption and policy enforcement and has about 10 million users at some 35,000 companies. Under the deal, which is expected to close by the end of the third quarter of this year, Postini will become a wholly owned subsidiary of Google, according to the two companies.


The hosted Google Apps suite offers business users useful applications and tools without having to maintain them on their own. Google Apps, which was launched last August and is now in use by more than 100,000 businesses, includes Gmail, Calendar, Talk, Docs & Spreadsheets and a Personal Start Page. A fee-based Google Apps offering for large businesses launched earlier this year provides a wider range of services for about $50 per user annually. [read more]

Google's Rajen Sheth adds:

Since launching Google Apps last August, companies of all sizes have experienced the benefits of delivering simple, useful hosted applications to their employees. However, larger organizations are frequently forced to choose between taking advantage of the latest innovations that will make employees more productive and ensuring security and corporate compliance ... We hope that by providing a more complete communication and messaging solution, even more users will have the chance to experience the joy of hosted applications. [read more]

Ken Fisher:

The big question is, what is the future of Google's own spam filtering efforts? Postini is a leader in corporate spam filtering, if not the leader. Google also runs its own spam filtering service that it uses for Gmail. Whereas Gmail's spam filtering was once much lauded, these days it has become yet another stab in the dark at spam, even if it is still one of the better ones.


Google does have a fantastic habit of purchasing commercial software and services companies and turning their products loose on end users. While Postini isn't perfect (no spam filtering service is), I suspect I speak for many messaging system admins when I say that a free drop-in Postini spam and anti-virus filtering service could make the hosted version of Gmail for Domains considerably more attractive.  [read more]

But your humble blogwatcher disagrees:

Postini is best known for its ... spam filtering service, but that's not what attracted Google. Gmail and its Google Apps. cousin already have sound spam filtering technology -- they don't need help from Postini.

What Google needed was a way to round out its Google Apps. story with solutions for its customers' policy, compliance, and archiving/e-discovery needs. Google was already partnering with Postini to provide this for Google Apps. customers. Presumably the experience was a positive one and Google simply wanted to own the technology and people.

Google's statements hint that the lack of Google-owned technology in these areas has been a sales inhibitor. [read more]

Rob Hof, too:

Postini ... provides email security and compliance services (plus spam filtering, but that clearly isn't the main reason Google did this deal). Basically, lack of security and compliance services has been perhaps the biggest obstacle to Google getting big companies to sign up for Google Apps. They have practical, legal, and regulatory requirements to secure and archive their emails, and Google's assurance that its service was safer than hosting it themselves just didn't cut it.


Plus, Postini's 35,000 customers are a nice, readymade list for Google's enterprise salespeople to mine. Google still has to overcome concerns about whether any hosted service will be acceptable to big enterprises. But no one can now mistake whether online office applications are one of the company's key pushes beyond search. [read more]

Joe Weisenthal:

Google's entry into this space is logical. No company has better knowledge of what's on the internet than Google, and as more and more security threats are web-borne, Google's position makes it a natural player in this market. If Google continues to expand in this area, it'll be interesting to see whether its competitors wave the antitrust stick at it. If companies like Symantec and others feel that Microsoft is making it hard for third parties to secure its software, it's going to be even harder for a third party wishing to secure Google's online apps. [read more]

But Donna Bogatin goes all curmudgeonly:

Is a Google-Postini “creative journey” in the best interests of the world’s enterprises? Will big business now sign on with Google Apps in order to “liberate” their own proprietary, private, confidential business communications, data and information from their own internal safe ”premises”?

If so, they would be foolhardy. Here is but one reason why: All proprietary enterprise communications, information and data manipulated by Goolle-Postini will be tracked, housed and archived in Google’s “massively scalable” data centers strategically located throughout the world. Remember, what goes in Google server farms, stays in Google server farms FOREVER. [read more]

Matt Marshall runs the numbers:

Google also nabs the company before it filed for an initial public offering, which may have raised its value by millions more. However, it isn’t clear why Postini had been waiting. Two years ago, the company said it was profitable, and that it was an IPO candidate. The company was founded in 1999 ... [and] had raised $26 million in venture capital from Bessemer Venture Partners and Mobius Venture Capital.

Postini’s acquisition looks to finally delivers a profit to Mobius, a venture firm that has struggled over the years without returning capital to its investors and eventually was forced to wind down. Notably, the Postini deal was led not by a Mobius partner, but by principal Ryan McIntyre. [read more]

Speak of the devil, here's Ryan McIntyre:

As investors, we at Mobius Venture Capital couldn't be happier with this development. I've had the pleasure of working with the world-class team of management, investors and fellow board members at Postini since we invested in October of 2001. I have watched the company grow from a small and relatively obscure service with perhaps a couple hundred customers to a significant company with international operations and multiple data centers supporting over ten million users across 35,000 businesses.


Postini was a SaaS company well before SaaS was cool, and probably even before the acronym of SaaS had been coined. We loved the ease of deployment (just a change to the MX record in DNS) and the recurring revenue subscription model. And while the most notable SaaS companies to date have been built around specific vertical business applications, Postini is arguably among the first SaaS infrastructure companies. [read more]

Buffer overflow:

Around the Net Around Computerworld Previously in IT Blogwatch

And finally... Think landing in a crosswind is easy? [dig that French soundtrack]

Richi Jennings is an independent technology and marketing consultant, specializing in email, blogging, Linux, and computer security. A 20 year, cross-functional IT veteran, he is also an analyst at Ferris Research. Contact Richi at

Copyright © 2007 IDG Communications, Inc.

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