Webroot acquires U.K.-based SaaS vendor Email Systems

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Updated Nov. 28 at 1:39 p.m. EST.

Webroot Software, best known for its Spy Sweeper anti-spyware product, is moving into the software-as-a-service (SaaS) market via the acquisition of U.K.-based Email Systems.

Webroot did not reveal financial terms of the deal.

The purchase gives Webroot the tools to deliver to its North American customer base a variety of hosted messaging security services, including email archiving, image scanning and encryption and web filtering, as well as anti-spam, anti-phishing and anti-virus capabilities.

Peter Watkins, Webroot's president and CEO, told SCMagazineUS.com that an investigation into the market showed that the number of companies providing messaging security services via SaaS “was sparse,” adding that Email Systems had built a solid technology platform, taken it to market and proven its scalability and performance.

"We thought it was a wonderful opportunity to take that core technology and bring it into the U.S. with our presence," he added.

Email Systems protects more than 2.5 million email boxes worldwide and filters and scans more than 1.2 billion messages each month, according to Webroot.

“The acquisition moves Webroot into the high-growth security SaaS market," Brian Burke, program director of IDC's security products service, told SCMagazineUS.com. "This is really where the interest and high growth is. We expect revenue for the hosted messaging security market, which was just more than $300 million in 2006, to grow to $1.4 billion by 2011."

The hosted messaging security services arena has seen considerable consolidation in the past 12 months, said Burke.

"The big event was Google acquiring Postini, but Microsoft also bought FrontBridge and Websense acquired SurfControl,” he said. “It's clear there are lots of benefits to buying these hosted security vendors, so this makes sense on the Webroot side."

Burke added that the purchase also benefits Email Systems, because the Webroot name "gives them a recognized security brand in the U.S."

Changing direction makes sense for Webroot, which has focused primarily on anti-virus software, Eric Ogren, president of the Ogren Group, a consulting firm, told SCMagazineUS.com.

"Webroot has taken in well over $100 million in investment money with not a lot of market share growth to show for it. It makes sense to change business models and to diversify away from a security pure-play,” he said.

"Instead of competing with the likes of McAfee, Microsoft, Symantec and Trend Micro, the company can lay its sights on the likes of Marshal, MessageLabs and Proofpoint. Organizations will always need to communicate via email and web technologies, and this places Webroot squarely in a position for sustainable growth. Webroot will have to add data-loss protection [DLP] functionality, so expect a technology acquisition in this space."

Watkins said Webroot will quickly merge a variety of technical functions from the two companies. These include product development and quality assurance and support. The company also plans to build a U.S.-based data center.

Jon Oltsik, senior analyst with Enterprise Strategy Group, told SCMagazineUS.com that the acquisition comes at a time when many companies are expanding the reach of their products. 

“Many of the desktop security players are extending their products and business models.  For example, McAfee added data-loss prevention in its client while Symantec supplemented SEP (Symantec Endpoint Protections) with NAC (network access control) functionality from Sygate,” he said. “To me, it is logical for Webroot to do the same, and managed services may be a good route given the company's strength in the SMB (small-medium business) space.”

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