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Symantec to acquire MessageLabs

Deal boosts Symantec's SaaS offering

Symantec has announced it is to acquire security software provider MessageLabs.

Symantec will pay $695m (£400m) for the security company, which offers a hosted spam and web traffic filtering service.

MessageLabs offers its services as a monthly subscription. The filtering is performed within the company's 14 data centres located around the world, a type of computing known as 'Software-as-a-service' (SaaS) or cloud computing. It also can route a company's web traffic through its filters to block potentially harmful websites as well as scan instant messages.

SaaS offerings have been increasingly popular with businesses since it frees administrators from installing software upgrades and performing other maintenance tasks they would have to do in-house. MessageLabs' subscribers turn over the management of their email and web traffic security to the company and do not have to install on-site equipment.

For Symantec, the acquisition of MessageLabs gives it an alternative email security offering to BrightMail, the company's antispam and antivirus appliance.

"We think the opportunity to expand our footprint in the rapidly growing software-as-a-service market is significantly enhanced by this team becoming part of Symantec," Symantec CEO John Thompson said.

MessageLabs holds a 29.7 percent share of the hosted security services market, followed by Google, which owns Postini, at 18.7 percent and Microsoft at 8.7 percent, according to Symantec. Before this acquisition, Symantec held just 1.1 percent.

MessageLabs' service will be integrated into the Symantec Protection Network, an online-based backup, data restoration and remote access service launched in April 2007 for small to medium-size businesses. Symantec will put its Protection Network services within MessageLabs' data centres.

Symantec also said it is going to create a specific software-as-a-service focused product group. Adrian Chamberlain, CEO of MessageLabs, will lead the team and report to Enrique Salem, Symantec's chief operating officer.

MessageLabs has about 19,000 clients worldwide. The company reported $145m in revenue for its 2008 financial year that ended July 31. The revenue figure is 20 percent more than in 2007.

Symantec officials also said two-thirds of MessageLabs' customers are in Europe, and Symantec sees opportunities for pushing the company's service in the Americas. Symantec is based in Cupertino, California.

The deal, expected to close by the end of December, is subject to approval by regulators.


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