10 July 2007

Google buys Postini to sell infosecurity as a service

SA Mathieson

Google is buying its way into the infosecurity market, through purchasing security service provider Postini for $625 million (£310m, EUR458m) in cash, it said on 9 July.

In its press release, Google said it “will continue to support Postini customers and invest in Postini products”. It added that Postini, based a few miles north-west of Google in Silicon Valley, will join Google Apps, its hosted range of office productivity software.

“With the addition of Postini, our apps are not just simple and appealing to users – they can also streamline the complex information security mandates within these organisations,” said Eric Schmidt, chief executive of Google, for both small customers as well as large ones.

Both Google and Postini offered reassurances to Postini’s customers. “We are fully committed to Postini’s products and customers,” said David Girouard, general manager of Google Enterprise, in a conference call. “We fully intend to develop them further, and to support them.” He added: “Of course, we will make it as easy as possible and as tempting as possible for Postini’s customers to try Google Apps.”

“It will be business as usual in the first phase of this merger,” said Postini’s chief executive Quentin Gallivan in the same call. “In future, Postini’s customers will benefit from further innovation and new services,” in areas including secure communication and collaboration.

Nigel Stanley, practice leader for IT security at Bloor Research, said Google needs to take a cautious approach on cross-marketing. “What would be bad is if Google stomps all over the Postini customer base, and forces people to go down the [Google Apps] hosted software route,” he said.

Peter Lorant, Postini’s senior director of marketing for Europe, the Middle East and Africa, said early reaction from large customers was “extremely positive”, due to Google sharing Postini’s approach of software as a service. He added that, as with Google’s purchase of online advertising firm DoubleClick, the intention is that Postini becomes a wholly-owned subsidiary rather than be absorbed: “They bought us to scale us even bigger,” he said.

Lorant said it was too early to discuss how Postini’s products would integrate with Google Apps, but added: “I think there are large opportunities there.”

Eldar Tuvey, chief executive of UK-based ScanSafe, said that the Postini purchase demonstrates a pattern: in May Google purchased GreenBorder, another Silicon Valley IT security firm. “Google is placing ever more emphasis on ensuring the safety of its users’ web-based applications and searches,” he said in an email. “[This] has reinforced the growing awareness in the market that security is best delivered through a software-as-a-service, on demand approach.”

“Now that Google has successfully entered the market for hosted office applications, it needs to assure customers that its offerings are secure against spam, viruses and other malware,” he added. ScanSafe provides Postini with functionality for its Web Content Manager product.

Bloor’s Nigel Stanley added: “For Google, this lets it wave the security flag, and say aren’t we better than Microsoft as we’ve made a significant investment. It will be interesting to see what Microsoft’s reaction will be – this overcomes one of the significant objections to the hosted applications route.”

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