As we prepare for our end of year reporting and analysis season; some early news is that the BackChannel search engines have identified striking new information on the use of hosted security market.
Over the last few years these services delivered by the likes of market leaders Messagelabs, Postini and MXLogic have seen a 20% CAGR. We now measure overall customer numbers as static.
Despite having seen some of the most valuable/expensive buyouts during recent years; hosted security services are at last starting to feel the pinch.
Messagelabs acquired by Symantec 2008 for $695m
Postini acquired by Google 2007 for $625m
Surfcontrol acquired by Websense 2007 for $400m
Scansafe acquired by Cisco 2009 for $183m
MXLogic acquired by Macafee 2009 for $140m
A lack of uptake by 'new-new' customers has impacted sector growth. There also appears to have been a fair amount of churn amongst the existing install base, as vendors price aggressively for service contract renewals, in what has been pretty much a zerosum game in 2009.
Actual individual services amongst major organisations have dropped 1.5% to 2% depending on the geography and level of local competition. The good news for service providers and their investors is that this is mostly due to organisations consolidating their email domains, so installed base of user seats is holding steady.
Fortunately for the acquiring companies it's less of a downturn in the market, more of a stall and we predict that these figures will start to rise in the latter half of 2010 as confidence returns and the vendors switch tactics. This remains no-brainer technology, economic circumstances don't make it any less so.
In the current climate we believe vendors should be looking at mopping up exercises - pulling in rogue divisions of large customers that have done their own thing. Consolidating is always a good way for a customer to save money, and a supplier to add value.
If you're interested in pricing for the January 2010 Hosted Mail Security Market Report from BackChannel email firstname.lastname@example.org for more details.