Educom TS Inc., an Ottawa e-mail management software vendor, has been bought by a California solutions provider, which likes the Canadian firm’s channel strategy.

“”We have a direct sales force that is primarily focused in North America,”” said David Greene, director of product marketing with

Zantaz Inc. “”Educom has an international reseller network. It opens up lots of opportunities for us.””

Zantaz , a compliance and electronic discovery solutions provider, didn’t reveal the acquisition price, which was announced today and is effective immediately.

It marries Zantaz’s hosted compliance and discovery solutions with Educom’s onsite e-mail archiving and management applications, allowing customers to be offered end-to-end e-communications management solutions.

“”We decided that we wanted to be a complete solution provider,”” said Greene. “”The companies are made for each other. There’s very little overlap.””

“”Educom views the merger with Zantaz as an opportunity to dominate the e-communications, storage management market place,”” said Andrew Moffat, president of Educom. “”With Educom’s and Zantaz’s best-of-breed products, Steve King’s leadership and the combined talent of the management team, I am confident that Zantaz will exceed all of its targets for 2004.””

But David Fung, president and CEO of Charon Systems Inc., an Educom reseller, said it won’t be as significant for the channel.

“”I think the merger is excellent news for Educom, but do not expect it to have a great impact on its reseller partners, such as Charon Systems.””

Greene predicted that with the acquisition, 20 per cent of Zantaz’s sales would come from onsite solutions this year while 80 per cent will be from hosted solutions.

The merger will allow Zantaz to reach new vertical markets including healthcare, pharmaceuticals and manufacturing, said the company. With Educom’s network of approximately 70 distributors and resellers worldwide, it also positions Zantaz to enter markets in Europe, Australia and Asia among others.

E-mail archiving vendors like Educom as well as traditional storage vendors like Computer Associates offer e-mail archiving solutions as products for in-house enterprise deployment, while outsourcers like Zantaz, Sector Inc. and Iron Mountain Inc. offer solutions as a service for a monthly or annual subscription fee.

According to The Radicati Group Inc., a Palo Alto, Calif.-based technology market research and consulting firm, Zantaz held a 71 per cent market share for hosted e-mail archiving solutions based on suppliers’ services revenue last year.

A Gartner Inc. study says Educom – which will be re-named Zantaz Canada – holds a 25 per cent market share for onsite e-mail archiving vendors based on installed base by number of customers.

The Stamford, Conn.-based research firm defines e-mail active archiving as a searchable archive of all e-mail messages for a set period of time that can be used independently or as part of a corporate business record repository for legal and business management uses. E-mail archiving technology also helps companies reduce the size of production e-mail data store to gain operational efficiencies.

These products capture and store all e-mail sent or received at the SMTP Internet mail relay or gateway or by journaling and send the messages to disk, optical or tape storage.

The e-mail active archiving market has emerged as a result of two key factors: growth in e-mail traffic volumes and size and number of mailboxes, according to Radicati.

It added that the solution addresses three management problems: storage issues, regulatory compliances from agencies such as U.S. Securities and Exchange Commission, and legal or internal policy compliance issues.

Masha Khmartseva, senior analyst with Radicati, said the merger will make Zantaz a market leader in e-mail archiving.

“”Zantaz had the biggest share for the outsourcing market. With this merger, Zantaz will have a very big share of the other part of the market. It’s going to be a very powerful company.””

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