Symantec Pursuing Security SaaS

Symantec (News - Alert), a provider of anti-virus software, reportedly is entering the security software-as-a-service sector.

 

The company says it’s eyeing a plan to acquire MessageLabs, an online messaging and Web security company.

 

Symantec recently announced that it’s signed a definitive agreement to acquire the company for nearly $700 million. The deal is expected to close by the end of 2008 calendar year. With more than 8 million end-users and more than 19,000 clients, MessageLabs is considered a leader in online messaging security services.

 

The growth in security software and appliance market has slowed down, while the security SaaS (News - Alert) sector has been highly competitive. Symantec’s move to enter into managed services market is viewed as company’s strategy to sustain growth in the security services sector.

 

However, experts say that the company’s move may pose risk to its other channels and modes of delivery.

 

Symantec stepped into the software services market at the right time, just as the services are evolving into the fastest-growing security market and outpacing software and appliances in terms of growth. To benefit from the transition to the service-based delivery of security solutions, Symantec has also launched Symantec Protection Network in the United States.

 

With the acquisition of MessageLabs, Symantec will capitalize on cross selling and up-selling its existing SaaS offerings of backup, storage and online remote access and potentially data loss prevention capabilities, complementing MessageLabs’ incoming content filtering technology. Future SaaS offerings will be enhanced by MessageLabs’ expertise in SaaS sales, operations and support.

 

The acquisition will enable Symantec to expand to the EMEA market, where MessageLabs has a significant presence. Symatec also stands to benefit from up-selling its solutions to MessageLabs’ 19,000 customers and extending its reach within the SMB sector by offering more flexible pricing models and lowering entry price point for more advanced security solutions.

 

Symantec says it plans to integrate MessageLabs and re-brand it rapidly, as a component of its wider SPN offering. By integrating the technology, Symantec will be able to use the same infrastructure of security operation centers to provide services for consumers, SMBs and large enterprise customers, thus reducing costs and increasing its ability to expand their customer base rapidly using the same service provision infrastructure.

 

Though the move towards SaaS will benefit Symantec’s bottom line, it will pose challenges to its channel partnerships and existing license revenues.

 

Experts believe that though the integration will not threaten Symantec’s revenue in the long run, the company needs to maintain a fine balance between services, appliances and software and enable customers to combine these delivery methods according to their requirements. Such a measure would ensure that customers who are reluctant to use a SaaS model would continue receiving the services from Symantec’s onsite security solutions.

 

To deal with the SaaS channel competition with its other channels, it must allow its partner network to benefit from the roll out of SaaS. Additionally, it should offer flexible solutions such as mixed-mode deployments so that customers can opt for services and components from both portfolios.