Acquisitions Spur SaaS Offerings from the Big Guys

If you're a company that develops a good product in the IT sphere, somebody larger is going to want to snap you up. Witness most recently Symantec’s announcement of its intent to purchase MessageLabs. Symantec is paying $695 million to add MessageLabs’ proven hosted spam and web filtering to its Symantec Protection Network, a Software as a Service (SaaS) storage option launched in April 2007. Symantec is also creating a SaaS-focused product group that Adrian Chamberlain, CEO of MessageLabs, will be heading up, with the intention of expanding Symantec’s web-based offerings.

The big guys gobbling up the little guys is a fact of life as old as the first amoebas. Microsoft has been doing it—well, almost as long as the amoebas. Or so it seems. But other recent deals in the IT sector display this same trend—Cisco Systems acquiring PostPath, Dell purchasing MessageOne, Google gobbling up Postini. And in each of these cases, at least part of the reason behind the acquisition has been to enhance the company’s offerings in the SaaS, or cloud computing, market.

Microsoft has been making a serious push into SaaS with its release of Microsoft Online Services, giving users the chance to get Exchange Server, SharePoint, Office Live Meeting, and Office Communications in a hosted environment—a move which has been seen largely as driven by fear of Google. Google and Microsoft have both been showing their intent to be dominating forces in this emerging market. Now Symantec, Cisco, et al., appear to be playing catch-up. Even IBM is getting in the game with its release last week of a beta of Bluehouse, the company’s new online collaboration platform based on its Lotus line.

Does this trend alarm you at all? Is it a case of the big guys recognizing of the viability of SaaS? A belief that enterprises are now ready to choose such solutions? Or does this wave of acquisitions and releases have more to do with competition, each big company trying to one-up the others? Or is the trend related to simple economics—companies in difficult economic times looking to expand and diversify their product offerings? I guess the smartest answer would be to say it’s a combination of all these things.

One thing is clear: Anyone who thought SaaS was just a passing fad might need to rethink that position.

A fear I’m sure a lot of people have about SaaS is the potential reduction in IT jobs as a result. One valid reason for companies to outsource to the cloud something such as their messaging system is the cost savings from a reduction of IT staff. My guess would be that a lot of companies will be willing to relax their personal security standards and even their service availability expectations if the bottom-line numbers favor choosing a SaaS option—particularly in difficult economic times. The budget’s got to be cut somewhere, and that often means letting go of something you used to think you couldn’t do without.

So, what can you as an IT professional do? Embrace the cloud! Hey, somebody’s got to manage those systems. But also, do what the big guys are doing: Continue picking up the pieces you need to improve and diversify your skills. Make yourself that great product that will make employers want to snap you up. Check out Caroline Marwitz’s excellent blog on this topic, “How Can IT Pros Survive and Thrive in Tough Times?” 

Here’s a roundup of some of the recent SaaS news from Windows IT Pro:
Do You Drive a Hybrid? 
When SaaS Goes Bad
TechEd in the Cloud
SaaS: It’s Closer Than You Think

If you’re interested in more information about Microsoft’s cloud computing options, try these articles:
What You Need to Know About Microsoft Online Services 
Microsoft Exchange Online: An ASP's Reaction 
Exchange and SharePoint: At your Service 
Microsoft's New Online Services