Symantec's Big Move Into SaaS Will Likely Be Rocky
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Symantec's Big Move Into SaaS Will Likely Be Rocky Document Transcript

  • 1. Research Publication Date: 10 October 2008 ID Number: G00162251 Symantec's Big Move Into SaaS Will Likely Be Rocky Arabella Hallawell, Peter Firstbrook Symantec plans to pay a premium for MessageLabs and enter the e-mail software-as-a- service market. Success will require Symantec to reconcile e-mail security investments and maintain MessageLabs' inbound protection focus. © 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The conclusions, projections and recommendations represent Gartner's initial analysis. As a result, our positions are subject to refinements or major changes as Gartner analysts gather more information and perform further analysis. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.
  • 2. NEWS ANALYSIS Event On 8 October 2008, Symantec announced an agreement to acquire MessageLabs, a provider of online messaging and Web security services, for $695 million. Symantec expects to close the transaction by year-end 2008. Analysis This document was revised on 15 October, 2008. For more information, see the Corrections page on gartner.com. Acquiring MessageLabs would give Symantec a foothold in the high-growth e-mail security software as a service (SaaS) market, and a launch pad for more SaaS services — but at a price tag of nearly five times MessageLabs' 2008 revenue. Symantec has considerable share of the e- mail security market as a result of its Brightmail acquisition in 2004. With MessageLabs, Symantec will have a 20% share of the market. However, as market demand has trended toward the appliance and SaaS delivery models for e-mail security, most of Symantec's Brightmail customer base remains on software; customers have been reluctant to shift to the company's e- mail security appliances. Symantec’s plan to invest in SaaS raises questions about how it can maintain an appliance strategy for gateway security, especially as MessageLabs will reside in Symantec Protection Network (SPN) platform group (which includes only backup SaaS), and will be separate from the Brightmail business unit. Symantec will have to carefully reconcile how it positions its two e-mail security businesses to its customers and its sales team and product groups. Although the e-mail security SaaS market is growing, it increasingly intersects with Web security, an area where Symantec has no presence and MessageLabs has promising but nascent capability. Symantec must augment its presence in the secure Web gateway (SWG) market. Although e-mail archiving, storage and disaster recovery represent growth areas for SaaS and could benefit from existing Symantec technology, Symantec must not lose focus on MessageLabs core competency: providing best-of-breed inbound threat protection. Other challenges accompanying this deal are: • Price pressures from key competitors Google and Microsoft. Microsoft includes its SaaS offering, Exchange Hosted Filtering, as part of Enterprise Client Access License agreements, and Google can offer deep discounts to win enterprise business. • Potential for sales channel conflict, especially in North America. In North America, MessageLabs partners with IBM and Verizon for sales, but Symantec will likely rely less on these partnerships and use its own sales presence in North America to improve margins. Furthermore, Symantec’s channel is largely conditioned to sell software rather than SaaS. RECOMMENDATIONS • Verizon and IBM MessageLabs North American customers: Expect to transition in 2009 as Symantec rationalizes distribution channels. Publication Date: 10 October 2008/ID Number: G00162251 Page 2 of 4 © 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
  • 3. • Symantec Brightmail software customers: Consider moving to a SaaS offering, and pressure Symantec sales to transition to MessageLabs services with your Symantec agreements. • Symantec appliance customers: Request assurances regarding Symantec's commitments to the appliance road map, including how threat protection research and product enhancements will be maintained with a split between the SPN and Brightmail groups. RECOMMENDED READING • "Magic Quadrant for E-Mail Security Boundaries” —The e-mail security market is maturing, but speed and breadth of spam detection, and management and reporting capabilities, continue to differentiate vendors. By Arabella Hallawell and Peter Firstbrook • "Magic Quadrant for Secure Web Gateway” — Incumbent SWG providers have been slow to respond to changing demands, while new vendors are struggling to get the right product mix and prove their mettle in the demanding enterprise market. By Peter Firstbrook and Lawrence Orans (You may need to sign in or be a Gartner client to access the documents referenced in this First Take.) Publication Date: 10 October 2008/ID Number: G00162251 Page 3 of 4 © 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
  • 4. REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT 06902-7700 U.S.A. +1 203 964 0096 European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM +44 1784 431611 Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA +61 2 9459 4600 Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo 153-0042 JAPAN +81 3 3481 3670 Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, 12551 9° andar—World Trade Center 04578-903—São Paulo SP BRAZIL +55 11 3443 1509 Publication Date: 10 October 2008/ID Number: G00162251 Page 4 of 4 © 2008 Gartner, Inc. and/or its Affiliates. All Rights Reserved.