Anti-virus specialist buys Canadian anti-spam firm

U.K. anti-virus company Sophos Wednesday announced it has bought Vancouver-based anti-spam specialist ActiveState in an effort to broaden its appeal to the “”e-mail

hygiene”” market.

Through a US$23-million cash deal, the respective vendors will integrate their offerings into one package. ActiveState’s PureMessage tool will become the forefront brand for the merged company, containing anti-spam, anti-virus and e-mail policy enforcement elements.

The purchase was a natural move for Sophos, said Stephen Orenberg, president of its American operation based in Lynnfield, Mass. The anti-virus market continues to grow at approximately 15 per cent annually, he said, but there is an even bigger opportunity available to sell anti-spam into the enterprise.

“”Our customers . . . are looking to us and saying, ‘The lines between anti-virus and anti-spam are getting greyer and greyer. Do you also have an anti-spam solution?'”” he said. “”They really want an integrated solution — not just in a product but from a single source.””

Meta Group analyst Matt Cain, based in Stamford, Conn., expects to see more mergers of this type in the near future. “”To us, this was basically a validation of what we expect to be a significant market consolidation in the overall e-mail hygiene market,”” he said.

Over time, larger anti-virus players like Network Associates and Symantec will take a greater interest in anti-spam, he said, and begin to dominate the market. In January, for example, Network Associates bought spam filter company Deersoft.

At the moment, customers are more concerned with “”who has a better mousetrap. Clearly we expect to see much more equivalency between spam-blocking offerings over time and at that point vendor viability becomes a requisite evaluation criteria. At that point, smaller vendors will start to drop off the short list.””

The Sophos/ActiveState deal makes sense not only from a product perspective, but geographically, he added. The overwhelming majority (about 96 per cent) of ActiveState’s business in the U.S., while Sophos is stronger in Europe.

Orenberg said that ActiveState’s Vancouver location gives Sophos an opportunity to establish a West Coast presence. There are 104 ActiveState employees, all of which will be added to Sopho’s existing roster of 520.

Product integration will be finalized sometime in 2004, then development can begin apace to work on joint solutions, said Chris Kraft, director of product management for PureMessage.

“”There’s a lot of opportunity to just generally harden the security now having the development teams rubbing shoulders, providing anti-spam and anti-virus protection. . . . We can consolidate efforts around message streams as they come in and out of an organization,”” he said.

Sophos and ActiveState have worked together for six months through OEM and co-marketing agreements, said Orenberg. The partnership made sense given the natural confluence of the anti-spam and anti-virus markets, but wasn’t initially formed with an acquisition in mind, he said.

Sophos attempted to gain a foothold in the Canadian market earlier this year by retaining the services of marketing firm Keating Technologies Inc. and struck a distribution deal with EMJ Data Systems in July.

In April, ActiveState formed the Anti-Spam Task Force with other vendors in the market to improve e-mail content analysis and help establish industry-wide anti-spam standards.


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