Symantec Acquires MessageLabs

By Stephanie Jordan
in

We have been in a period where almost weekly there has been a significant acquisition to cover, and this week is no different. Yesterday, Symantec announced it has signed a definitive agreement to acquire U.K.-based MessageLabs, a provider of online messaging and Web security services. This follows on the heels of competitor McAfee’s Sep. 22 announcement to acquire Secure Computing Corporation. With the acquisition of MessageLabs, Symantec says it will gain a leadership position in the rapidly growing Software-as-a-Service (SaaS) segment and strengthen its lead in the messaging security market.

Symantec believes that MessageLabs is the number-one provider of online messaging security worldwide stating that it has more than eight million end-users at more than 19,000 clients ranging from small business to the Fortune 500. Symantec will capitalize on cross-selling and up-selling its existing SaaS offerings of backup, storage and online remote access into the MessageLabs customer base.

In the announcement, Symantec chairman and CEO John Thompson states, “MessageLabs extends our investments in the SaaS segment and will allow us to offer our customers unprecedented choice from a single provider of message security solutions. By combining MessageLabs with our Symantec Protection Network team, we have one of the strongest portfolios of cloud-based infrastructure services and a great foundation on which to grow.”

The news has not missed the attention of other messaging vendors. “Symantec’s acquisition of MessageLabs is yet another validation of how reducing the risks associated with email continues to be one of the top enterprise security concerns,” comments Proofpoint CEO Gary Steele. “In today’s economic environment, companies are looking to SaaS and hybrid deployment models (that combine SaaS solutions with on-premises appliances or software) as a cost-effective way to meet their security needs.” Steele is quick to point out that Proofpoint has been offering SaaS and hybrid email security for more than a year and has seen extremely strong interest from companies worldwide. “The large security providers like Symantec have had difficulty in keeping their email security solutions effective—and in keeping up with the latest deployment trends—while also trying to secure the entire enterprise IT infrastructure.” continues Steele. “Acquiring SaaS email security from a company like MessageLabs is the only way companies like Symantec can really stay competitive.”

According to the announcement, MessageLabs plus Symantec Protection Network will result in the creation of a new Symantec SaaS product group to accelerate the development of new SaaS solutions and hybrid offerings for IT professionals. IDC describes SaaS as one of the most impactful trends in software with a current estimated market size of $5.71 billion USD (in 2007) reaching $16.98 billion USD by 2012.

Under the terms of the agreement, Symantec acquires MessageLabs for a purchase price of approximately $695 million USD in cash, subject to foreign currency adjustments, payable in approximately £310 million Pounds Sterling and $154 million USD.

Published October 9, 2008