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July 09, 2007Google Snaps Up Postini for $625M
The battle between Google and Microsoft is heating up with Google's purchase of Postini, a deal that is expected to close in the third quarter. While it might seem that Google is making a play in the security department to go after Microsoft Vista, the real reason for this buyout is Google’s straight-on challenge to the very core of Microsoft: office applications.
``This brings Gmail up to enterprise class, embedding the security,'' said Peter Firstbrook, a research director at Stamford, Connecticut-based Gartner Inc. ``They need to compete directly with what Microsoft is offering.''
This move is intended to shore-up some of the security challenges Google has faced with the introduction of Google Apps, which are Google’s hosted software applications. While 1,000 businesses are currently signing up for Google Apps each day, big businesses have been less willing because of concerns about security and compliance issues.
The purchase of Postini will enable Google Apps' customers to scan and encrypt email, as well as cover any compliance issues. Google launched the premier edition of Google Apps in February, priced at $50 per user, but the service ran into problems in March when customers complained Google wasn’t meeting service availability agreements. Also, the availability of crucial documents while offline has become an issue, which Google intends to address with Google Gears.
Postini has offices in San Carlos, Calif., and executives from both companies stressed the shared cultural similarities between the two CA based companies and their mutual desire to deliver software as a service. This merger will certainly help with the next step of that goal, which is delivering fully secure software as a service.
One of my first podcasts was with Postini, and while Google was never mentioned, we discussed the various threats including Web 2.0. You can listen to it by clicking here.
Tag: google, postini, SaaS, hosted applications, Nicrosoft,
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