Symantec to buy security rival MessageLabs

Symantec Corp. has signed a definitive agreement to acquire MessageLabs Ltd., a leading provider of online messaging and Web security services, for approximately $695 million in cash.┬á  California-based Symantec, the worldÔÇÖs largest maker of security software, is best known for its Norton PC security software products.┬á MessageLabsÔÇÖ technology helps clients protect e-mail, instant messaging and Web traffic from online viruses by routing it through filters at the companyÔÇÖs 14 data centers, a type of computing known as ÔÇ£software as a serviceÔÇØ (SaaS) or cloud computing. It provides its services online for a monthly subscription.┬á SaaS offerings have been increasing in popularity with businesses, because they free administrators from installing software upgrades and performing other maintenance tasks in-house. MessageLabsÔÇÖ subscribers turn over management of their e-mail and Web traffic security to the company and donÔÇÖt need to install on-site equipment.┬á UK-based MessageLabs generated approximately $145 million in revenue during fiscal year 2008 and grew by more than 20 percent over the prior fiscal year. It claims more than 8 million end users at more than 19,000 clients ranging from small businesses to Fortune 500 firms.┬á MessageLabs holds a 29.7 percent share of the hosted security services market, followed by GoogleÔÇÖs Postini service at 18.7 percent and Microsoft at 8.7 percent, according to Symantec. Before the acquisition, Symantec held only 1.1 percent.┬á Symantec will benefit by cross-selling and up-selling its existing SaaS offerings of backup, storage and online remote access to MessageLabsÔÇÖ customer base. ┬áThe agreement is subject to customary closing conditions, including regulatory approvals, and is expected to close by the end of 2008.┬á┬á┬á┬á┬á┬á┬á┬á┬á┬á┬á