Google to acquire Postini for $625M

Newsflash! – well sort of if you follow the messaging market like I do – Google will acquire Postini for USD $625 million. This news came “out of the blue,” so-to-speak. But not surprising given Google’s recent efforts to strategically enhance their software as a service offerings to appeal to small and medium sized organizations. Security and compliance is a top concern for all organizations, and the overlap of customer demographics between the two companies gives good synergy. Of course Google’s privacy rules may not be appropriate for the Postini business-class user, and Google still has a way to go to convince mid-market Information Technology decisions makers to embrace the Google compute cloud with their treasured IT assets.

This acquisition further validates the software as a service business model as a way to deliver cost-effective IT solutions for the mid-market. Increasingly, small and medium sized organizations are starting to look at hosted IT services as a better overall way to solve essential problems like security, compliance, archiving and long-term information management. Google taking a position in this product category expands the market opportunity for all hosted messaging vendors. Customers will be able to choose form several great SaaS archiving offerings in the near future.

At Sonian we believe hosted archiving services will be the best way to achieve storage and compliance goals for the mid-market enterprise. Hosted applications served by trusted partners elegantly solve essential business problems more cost-effectively than an organization can accomplish in their own data center.

I just checked Postini’s latest trend for Messages Processed: 580 million messages processed. With the $625 million purchase price in mind, looks like the value is about $1.08 for each message processed. Not that any serious financial analyst would use that formula.

These are exciting times in the messaging marketplace.