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Google-Postini deal: More than meets the eye

The e-mail marriage makes sense:Postini adds vertical integration for Google's outsourced Gmail business.

Google and Postini? Makes sense to me. Postini adds vertical integration for Google's outsourced Gmail business. Large companies won't outsource e-mail without security while mid-market companies want turnkey bundled solutions. Now Google has all of the pieces in hand.

The e-mail marriage is obvious but there's more here than meets the eye. Postini has focused on broadening its offering to secure other forms of communication beyond e-mail. For example, Postini has a great portfolio for compliance including e-mail encryption, archival, and policy-enforced TLS. Not very attractive for consumers doing Google searches, but real credible stuff for enterprise organizations struggling to jump over new regulatory hurdles. It is a lot easier to outsource this stuff.

When I heard about this deal I liked it immediately but the price seemed pretty high to me. For $625 million, Google could have offered a small fortune to every spammer in the world rather than grab Postini's e-mail surveillance, cops, and toolbox. Nevertheless, this is pocket change for Google. Google gets the obvious e-mail security and a whole lot of other high value security and compliance services that move it much closer to the enterprise.