Webroot Makes Smart Move into SAAS, Analysts Say

Webroot is joining a host of other companies offering security as a service.

Webroot Softwares merger with Email Systems is a smart play for Webroot as it looks to keep pace with the growing demand for security software as a service, analysts said.

The merger marks a decisive move by Webroot into software-as-a-service. Email Systems has provided SAAS-based e-mail and Web protection and management and compliance services since 2002, and currently covers more than 1,500 businesses and scans more than 1.2 billion messages per month.

Webroot has traditionally focused on securing small and midsize businesses, an area in which there has been increased interest in SAAS. IDC analysts predict that worldwide spending on hosted messaging security services, which totaled $300 million in 2006, will reach $1.4 billion by 2011.

"There is no question that software companies are recognizing that customers of all sizes, but especially SMBs, are becoming more receptive to SAAS solutions and prefer the ease of [deployment] and use as well as the pay-as-you-go pricing model of these services," said Jeffrey Kaplan, managing director of Thinkstrategies. "Managed security services are the leading example of this trend because companies are having trouble keeping pace with the escalating threats to their operations," Kaplan said.

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Other companies such as SecureWorks and Symantec have sought to take advantage of the trend as well. With this backdrop, the wedding of Email Systems and Webroot makes perfect sense, said Forrester analyst Chenxi Wang.

Click here to read more about Webroots merger with Email Systems.

"Symantec and many others, including Googles acquisition of Postini, all have long-term ambition in the content security service market," she said. "Websense, after the acquisition of SurfControl, now has a service business. Secure Computing has a service business. Microsoft is sharpening their content-related services—both hosting and security."

Gartner analyst Peter Firstbrook said Microsoft is the biggest player in the space besides Google-Postini, and said he expects Cisco will get into the game with IronPort technology.

"This is a pretty big part of Webroots strategy to grow, given that most of the AV vendors are getting better in spyware protection," Firstbrook said. "It is also a right turn for them as they have never been a service provider before."

Email Systems requires good anti-virus and anti-spyware technology to round out its SAAS business, Forresters Wang said.

"Webroot traditionally has been in the enterprise space, but only on endpoints. Webroot is by no means the leader in that market; consider the dominance by Symantec and McAfee," she said. "So for Webroot to branch out, the most natural place to go is content security, providing AV functionality for e-mail, Web filtering. So, the merger with Email Systems allows them an easy foray into the e-mail space," Wang said.

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