Google buys Postini for $625M

Google buys Postini for $625M

In a move designed to make the use of Google Apps more appealing and secure for large business users, the company has announced plans to acquire messaging security and compliance vendor Postini in a deal worth US$625 million.

Google said the move is aimed at helping Google Apps users establish necessary security for a company's email, instant messaging and other web-based communications. Postini offers services such as message security, archiving, encryption and policy enforcement and has about 10 million users at some 35,000 companies.

Under the deal, which is expected to close by the end of the third quarter of this year, Postini will become a wholly-owned subsidiary of Google, according to the two companies.

"The response to Google Apps has been tremendous, with more than 1,000 small businesses signing up for the service every day," Dave Girouard, vice president and general manager of Google's enterprise division, said in a statement. "At the same time, large businesses have been reluctant to move to hosted applications due to issues of security and corporate compliance. By adding Postini products to Google's technology, businesses no longer have to choose -- employees get the intuitive products they want, and the company achieves the security and assurance it needs."

Dana Gardner, an analyst at Interarbor Solutions LLC in New Hampshire, said the Postini acquisition should show large enterprise users that Google is serious about making its Google Apps offering more inviting. "Clearly, Google is on a steady march to making their [Google Apps] offering mission-critical [for large businesses]," Gardner said. "It shows that they're going to take aggressive steps to make their applications ... as carefree for enterprises as they can. I expect that given their resources and track record that they won't stop until they do that."

"It certainly makes sense," Gardner said. "Usually, Google will be in a position to buy or build. By buying [Postini], it shows that they wanted to do this quickly and they felt confident with Postini's technology."

Under the deal, Google will continue to support Postini customers and invest in Postini products, according to the companies.

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