Trouble Ahead for Microsoft

By Steven Vaughan-Nichols  |  Posted 2007-07-09 Print this article Print

"I talked to Google today and they acknowledged that not having solid security offerings is somewhat of a road block for them in the enterprise market. Thats why they bought Greenborders and thats why they are acquiring Postini. Is this the right move for Google? Absolutely!"

Wang said that Postinis offering, billed as compliance and archiving/e-discovery, is primarily an "in the cloud" provider for anti-spam, anti-virus e-mail content filtering services, which also provides archiving and compliance-oriented content filtering.
"Google is buying Postinis secure e-mail services, first and foremost. They are not buying Postini for their compliance offerings, trust me. Secure e-mail services are a business necessity," Wang said.
Its not just the IT analysts who are looking at this deal and seeing Google targeting the SMB and enterprise office markets. Citi Investment Research analyst, Mark Mahaney, liked the deal. He said that Googles play here is to use Google Apps to further penetrate the enterprise. Today, "Google Apps already has over 100,000 business customers [mostly small]. But to penetrate large enterprises, Google needs to add security, compliance, archiving and encryption functionality. Thats what the Postini acquisition provides," Mahaney said. It wont be as he puts it, a "near-term needle mover," but ... "with its third biggest acquisition to date [after DoubleClick and YouTube] Google is clearly positioning itself as an on-demand/software-as-a-service enterprise provider. We would expect more from Google in this sector going forward, including more acquisitions," said Mahaney. Taken as a whole this spells trouble for Microsoft, with its ever-changing Microsoft Live plans. In particular, Microsoft doesnt come close to matching Postinis offerings. Microsoft tried to get ahead of the curve in 2005 when it bought FrontBridge Technologies, and then relabeled it Microsoft Exchange Hosted Services, but that didnt work out as well as Microsoft hoped. In a Gartner report that Microsoft itself had published on its Microsoft Exchange Hosted Services site, the company had this to say about its own offering: "Consequently, Microsoft clearly has the ability to execute and is poised for growth, but its current solution is overly complex and/or lacks key functionality common in competitors products." And, Postini? In the same report, Gartner analysts said: "Postini is a very technically astute service provider, preferring to build its own core anti-spam and data center technology. Its e-mail processing is differentiated by all-in-memory processing rather than the store-and-forward method of rivals. Investments in fundamental data center design have led to lower costs and better margins—as well as better adaptability—than rivals. "Anti-spam capabilities are very good and include connection management via PTIN and value-added anti-virus capabilities with a 100 percent virus-free guarantee. From a product perspective, Postini has also invested in a number of recent ancillary services (encryption, archiving, IM hygiene, HTTP filtering) via a combination of native capability and the integration of numerous partner solutions. Postini provides better delegated administration capability for global and federated companies than rivals, and it has one of the best end-user capabilities in the market, including the ability for end users to set their own quarantine thresholds." According to Gartner, Postinis biggest problem was "a lack of international channel partners and data centers." Somehow I dont think that will matter much anymore with Google as its owner. Do you? I think its pretty darn simple. With Google being able to offer a quality office suite with Microsoft Office format compatibility at a cheaper price and with the kind of hard-to-manage e-mail/IM compliance technologies that SarbOx and HIPPA require, Google Apps Premier Edition is now the office suite for U.S. businesses. Its been a great run, Microsoft, but Office and Exchange are now officially in trouble. Senior Editor Steven J. Vaughan-Nichols has been using and writing about operating systems since the late 80s and thinks he may just have learned something about them along the way. He can be reached at Check out eWEEK.coms for the latest news, reviews and analysis about productivity and business solutions.

Steven J. Vaughan-Nichols is editor at large for Ziff Davis Enterprise. Prior to becoming a technology journalist, Vaughan-Nichols worked at NASA and the Department of Defense on numerous major technological projects. Since then, he's focused on covering the technology and business issues that make a real difference to the people in the industry.

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