Oracle CEO Larry Ellison roiled the waves recently when he mocked Web-based computing, but software as a service is doing just fine, as new moves from Google and Symantec testify.
Symantec moved to buy MessageLabs on Oct. 8 for $695 million in the largest security SAAS deal to date, dwarfing Google's $625 million purchase of Postini in 2007. Google Oct. 8 meanwhile tweaked the pricing model for its Postini-based MessageLabs SAAS security software and agreed to archive e-mail for up to 10 years.
The 451 Group Analyst Paul Roberts said SAAS security was the main thrust of Symantec's bid because MessageLabs has one of the most mature platforms for provisioning, delivering and managing messaging and SAAS security services.
This is a big deal for businesses that want to trade their on-premises security solutions for SAAS and find themselves worn thin by Federal Rules of Civil Procedure regulations for e-mail archiving. Roberts noted:
"The addition of [the] MessageLabs platform gives Symantec ... a mature, revenue-generating SAAS portfolio that includes e-mail, IM and Web threat detection. It also gives the company the development expertise to move ahead with its more comprehensive security SAAS vision, encompassing anti-data leakage, compliance and data archiving."
Roberts added that Symantec's huge channel and sales force, coupled with the failure of players such as Google to execute within the enterprise space, give it the opportunity to jump to the head of the pack in security SAAS. Ouch!
In short, MessageLabs is the SAAS security market leader and Symantec is clearly betting a big farm on it. Perhaps Ellison needs to bring out his fire hose to throw more cold water on SAAS. Or perhaps he'll at least make an exception for security-driven SAAS.
Struggles in the enterprise or not, Google is looking for new ways to make its Postini assets more attractive to corporations. Google changed its pricing to reflect the longevity it believes corporations desire from an SAAS service.
Google now offers Message Discovery for $45 per user per year for up to 10 years of e-mail retention, or $25 per user, per year, for just one year of archiving. Until Oct. 8, Message Discovery cost $25 per user, per year, for one year of retention, plus $10 per user, per year, for each additional year of retention.
With 10 years of service, Google claims businesses won't have to worry about hitting storage caps while allowing users to search and recover messages for legal discovery. Google Message Discovery, which includes anti-spam and anti-virus filtering, also supports the ubiquitous Microsoft Exchange and IBM Lotus Domino e-mail servers.
One page Symantec can take from Google's book with regard to future MessageLabs upgrades is that the marketing department should never miss an opportunity to tout the benefits of SAAS over on-premises solutions. Bill Kee, a member of Google's product marketing team, wrote in this blog post:
"When the total cost of an on-premise[s] security and archiving solution is taken into account, keeping e-mail over the course of seven years can cost more than $200 per user per year. Taking advantage of Google's economies of scale, you can achieve the same objectives for only $45 per user per year."