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Alan Pelz-Sharpe

Symantec acquires MessageLabs

16-Oct-2008

Tags: E-mail Archiving and Management, Marketplace at Large, Selecting Technology, CA Message Manager, Dell MessageOne EMS, Enterprise Vault, Fortiva, Zantaz EAS (Enterprise Archive Solution)

Last week Symantec agreed to purchase MessageLabs, the UK-based SaaS e-mail archiving service for $695 million, a truly astounding figure in today's difficult financial markets. It's a deal that asks as many questions as it answers.

On the one hand, it was little surprise that Symantec wanted to boost its SaaS offering, since despite bold assertions to the contrary, it has been clear that this was a hole for them, and one that they were unable to fix alone. But at this price, it is a hole that will need a whole lot of filling to get a return on the investment. That figure feels even greater when one considers that Symantec have not bought new archiving technology as such, for the little known secret is that MessageLabs actually relies on OEM'd technology from Fortiva to run. Fortiva itself was recently acquired by ProofPoint, and it remains in question whether this reliance on a rival's technology will remain viable in the long term.  

In short Symantec paid $695 million just for a service, a service that relies on somebody else's technology, a service that is largely restricted to the UK.  Perhaps they know something we don't.

Symantec is without doubt the e-mail archiving market leader, with Gartner estimating their share of market at 20%. But as customers our E-mail Archiving & Management services know all too well, market share does not equate to best fit or best buy. Though good technology comes from Symantec it is clearly not a always a good fit for buyers, particularly in a market that continues to deliver new, competitively priced, and innovative offerings.

In a sense then all this acquisition means is simply that people continue to bet big on e-mail archiving. It continues to grow as a area of importance for buyers (and vendors) around the globe, and as such we will continue to see the market evolve and grow rapidly. But remember, rapidly evolving markets can entail high risks for buyers. Our E-mail Archiving and Management Report points out that there are some good technology offerings out there. and e-mail archiving can represent one of the soundest of content investments, but it is not risk free, so evaluate the offerings very carefully before making your move.

In fact, you may well be surprised at just how radical the differences can be among the likes of Symantec, CA, Dell, Google and Autonomy. Some capture at the gateway, others by journaling, some provide stubbing, some don't. By default you can easily be dazzled, and end up buying great technology that turns out to be a poor fit for your particular needs.