Google Grabs Postini

Google today took a big step toward protecting its Web applications by acquiring partner and on-demand security software maker Postini for $625 million in cash.

Postini’s software services protect, encrypt, archive and enforce policies for e-mail, instant messaging and other Web-based communications. Google intends to underpin its Google Apps hosted software, which includes Gmail, Calendar, Talk, Docs & Spreadsheets, and Personal Start Page, with Postini’s hosted security software.

“There’s a fundamental premise to what we’re doing here,” said Dave Girouard, vice president and general manager of Google Enterprise, on a conference call.

“It’s centered on the idea that if you combine the user-centricity and simplicity of consumer applications with the manageability, the cost-effectiveness and security in enterprise technology, you would really have the best of both worlds.”

The bid comes as companies have increasingly been turning to hosted applications so they won’t have to worry about tying up their infrastructure by installing software on their premises.

With Postini’s security software and Google’s Apps, corporations can embrace the software-as-a-service (SaaS) model without putting the onus on their administrators to install and maintain traditional applications packages, said Girouard.

However, one of the drawbacks of the SaaS approach has been the lack of security and the inability to meet compliance regulations and conduct legal discovery.

While more than 100,000 businesses and hundreds of universities currently use Google Apps, some larger businesses have been loathe to use them because of the lack of protection against data loss and the dearth of measures to meet Sarbanes-Oxley and other data protection rules.

Girouard said that while Google has treated such issues by partnering with security and compliance providers, “we really believe that asking customers to pull the parts together themselves quickly begins to drain some of the value out of this software-as-a-service revolution.”

With Google tacking on Postini’s products, the search giant hopes to ease such concerns, opening the door for bigger revenue streams.

The buy should also give Google another leg up on rivals Yahoo and Microsoft, neither of which has made such strides in securing hosted software.

The stage was set for the deal in April, when Postini began offering its security software to support Gmail.

At the time, Osterman Research President Michael Osterman suggested that Google could well use Postini software to protect Google Apps. That theory has been proved prescient.

Google, which will continue to support Postini’s 35,000 business customers and invest in Postini products, expects to close the deal by the end of the third quarter.

Article courtesy of InternetNews.com