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News on messaging, content control, compliance, e-discovery, data leak prevention
Daily Digest: August 5, 2008
Content Control, Compliance, Archiving, E-Discovery, & Data Leak Prevention

PricewaterhouseCoopers and Stratify Establish Joint Business Relationship to Enhance Forensic Investigations with Advanced eDiscovery
PwC enhances its global forensic investigations expertise by adding advanced eDiscovery capabilities of the Stratify Legal Discovery service

Messaging & Collaboration

Ensim Unify Enterprise Edition Named 2008 Editor's Best Award Winner by Windows IT Pro Magazine  

Survey of Archiving Products -- Let us know what you think about the archiving products you use. If you add your own data, we will send you a summary of the findings. The survey just started--great if you can help get this off the ground by contributing your own policies

Survey of Retention Policies -- See the retention policies for various organizations here. If you add your own data, we will send you a summary of the findings

Secure Computing Introduces Secure Web Reporter for Complete, Real-Time Viewing of Web Activity, Security, Performance and Compliance
Web Reporter Provides Real-Time Web Monitoring; Improves Reporting Performance and Scalability

PostPath Server Named 2008 Editor's Best Award Winner by Windows IT Pro Magazine  

Australia's Leading Online Travel Agency to Standardize Customer Email on StrongMail
Webjet Ltd. to bring email marketing in-house on StrongMail's comprehensive platform to improve data security, control and deliverability

Blog Item(s)

McAfee Buys Reconnex

McAfee announced it will buy Reconnex.

Businesses of The Businesses:

  • McAfee's current security offering consists of: virus and malware control, spam control, phishing and spyware control, surf control/URL filtering, and malicious web site protection
  • Reconnex sells data leak prevention software, that scans inbound and outbound traffic

Nature of Synergism:

  • McAfee's current offering has limited data leak prevention, via user-defined policies. The acquisition substantially builds McAfee's DLP capabilities. And thus help it build a broader security offering
  • Reconnex gets cash needed to fund ongoing losses; plus access to McAfee much larger marketing capabilities

Finances, Terms of Deal:

  • $46M in cash
  • Preliminary guestimate of Reconnex finances: current revenue rate about $10M/year; unprofitable; revenue growth perhaps 20% annually
  • Preliminary guestimate price/sales ratio: 4 or 5:1.
  • Reconnex was founded in 2003, has never made money
  • Total capital raised to date by Reconnex: We think $37M. The last round we know of was in May 2006. Can anyone help with further information?

Comparable Deals:

Buyer/Seller Date Revenue Multiple Comments
Symantec/Vontu 11/07 Unclear; estimates are from 7:1 to 12:1. Can anyone help? $350M deal, Vontu unprofitable and claimed to be growing at 50% annually
EMC/Tablus 5/07 Can anyone help? --
McAfee/Onigma 2/07 Can anyone help? $20M deal
WebSense/PortAuthority 1/07 We estimate 18; can anyone help? $90M deal

Other Ferris Research Comments:

  • Part of a general trend of rich but stable anti-virus firms seeking to build their security portfolio
  • Along with Symantec and Trend, McAfee is one of the top tier anti-virus vendors. This business has been stable for several years
  • McAfee does over $1B/year, mostly in virus control. Over the last five years, McAfee has extended its offering beyond anti-virus, with limited success. It’s been making renewed efforts over the last 12 months to grow the non-anti-virus side of its revenues. This acquisition is clearly part of these efforts
  • Most or all Reconnex shareholders will have lost money on their investment
  • Vontu was Reconnex’s main competitor. In 11/07, Symantec acquired Vontu for $370M. Vontu was three or four times larger than Reconnex; Ferris Research estimates Vontu’s revenue run rate at $30M when it was acquired

Interesting Reader Comments:

Got Useful Info on This Deal? Tell Us About It!

... David Ferris


Cyber-Ark: Management of Privileged Passwords

Most identity management systems focus on handling "normal" users. Many servers, network routers, databases, and workstations have special privileged accounts. A high percentage of security breaches come from inside staff misusing such privileged accounts. These are handled badly by identity management systems, because they are general-purpose accounts that will be used by many people. Role-based approaches work for some situations, but do not generally have sufficient audit capabilities.

Cyber-Ark's solution authenticates individual users, and then provides them with access information for the system requested, subject to authorization. It also changes the passwords on the systems being accessed. This allows a number of access options, including time-limited, one-time access. Access to accounts is audited, with clear reporting provided.

This solution solves an important, specialized problem. Cyber-Ark has an impressive list of customers, including the Bank of England as a reference customer. ... Steve Kille



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About Ferris Research

Ferris Research studies messaging, and the control of electronic information. More specifically, we help IT staff evaluate and implement products and services that:

  • Provide messaging and collaborative technologies
  • Archive electronic information
  • Ensure compliance with corporate policy, industry regulations, and laws
  • Facilitate e-discovery, and contain its costs
  • Reduce the dangers of information leaks

Email is the most important type of electronic information that requires control today. Other important types include instant messages, Sharepoint teamspaces, images, voice, video, and miscellaneous desktop files.

We've been in business since 1990--longer than any other analyst firm in our field:

  • Clients include 300 of the world's 1,000 largest organizations, and computer vendors from the largest corporations to small startups
  • While other analysts have come and gone, we've published more than 200 formal reports and 1,100 short bulletins
  • Our news service covers more than 2,000 highly specialized announcements annually
  • We have nine experts in our research team, sharing many decades of experience in our core competencies

In short, our technology and industry depth helps you understand today's products, where they've come from and where they're going.

Have news you want to share with us or product or interest area that you would like us to cover? Send press releases to releases@ferris.com.

Copyright © Ferris Research 2008.


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