Symantec is buying MessageLabs for about $695m in cash. 'About' since MessageLabs is a British company and the volatility in global markets right now makes an accurate price difficult to pin down. Also, the deal, which is expected to close by year end, will split the cash purchase between approximately £310 million Pounds Sterling and $154 million US Dollars.
This acquisition will extend the capabilities of Big Yellow's SaaS play, the Symantec Protection Network. This is a great opportunity for the small/medium buiness (SMB) market to have a myriad of solutions available in one location with "one throat to choke" and only a single monthly invoice. This combined offering will now bring lightweight data loss prevention (DLP), compliance, endpoint security and archiving solutions within reach of the SMB market.
Essentially, the SYMC SaaS offering is a brand flanking move similar to The Gap, with Old Navy on the bottom and Banana Republic on the high end. Only in this case, the Symantec Protection Network is the middle tier with Norton on the low side and their enterprise solutions targeting the higher price points. Some will say we are incorrectly lumping Norton into this mix because it is a consumer brand, but if you have ever worked for or with a small professional firm, you know that many of them buy their PCs from the big box retailers which bundle Norton products in the purchase. As these firms grow, it will become natural for them to migrate to SaaS offerings instead of ramping up an IT shop of their own. Coupled with the August announcement to buy Australian anti-spyware vendor PC Tools, and the summer acquisition of consumer-focused online backup company Swapdrive , they are poised to be the IT shop in the cloud. The real trick is in whether or not they can pull it off, and based on past performance, we are skeptical. According to the press release , John W. Thompson, CEO of Symantec thinks they can do it (of course he does), saying “By combining MessageLabs with our Symantec Protection Network team, we have one of the strongest portfolios of cloud-based infrastructure services and a great foundation on which to grow.”
What remains to be seen is how customers will transition between layers of the model without losing major functionality, or interrupting their increasingly important IT services.
