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Daily Digest: April 30, 2009

Websense and Securosis Unveil Free Data Loss Prevention Resources for Executives  
Comment on Websense here

Survey of Spam Control Products, and Survey of Archiving Products -- See what others think of these products/services. If you add your own data, we will send you a summary of the findings.

Nemx Ensures Email Compliance For Force Protection, Inc.
SecurExchange Performs Real-time Content Inspection & Mailbox eDiscovery To Protect Over 1,000 Employees' Email

Lumension Extends its Leading Device Control Solution to Enhance Data and Endpoint Security for Microsoft System Center Customers
Lumension Partnership Extends Microsoft System Center Configuration Manager Customers Centralized Deployment and Management of Policies and Data Leakage Prevention

Messaging & Collaboration

Trend Micro Accelerates Dynamic Datacenter Security Strategy with Acquisition of Third Brigade
Customers to gain access to critical, industry-leading security and compliance solutions for physical and virtualized servers and endpoints
Comment on Trend Micro here

New MailShadow OnLine Offers Easy Sync Service
Online Sync Service Enables Easy Email Migration between Different Email Systems and Low-Cost Live Backup and Disaster Recovery

CyberPatrol Announces SiteSURV 3.5 – Customizable In The Cloud Managed Web Filtering For Small and Medium Businesses
Ability to Stop Employee Internet Abuse and Block Inappropriate Content and Illegal Downloads Reduces Liability and Security Threats for SMBs: Affordable In the Cloud Security Services Gain Traction

SpamTitan No1 in WINDOWSNETWORKING.COM Readers Choice Awards  

Introducing Panda Cloud Antivirus: The Industry's First Free Cloud-Based Antivirus Thin-Client Protection
Panda Cloud Antivirus introduces radically new protection model with lightweight thin-client agent and real-time scanning-from-the-cloud

Blog Item(s)

Exchange Providers Azaleos and M3TG Merge

Two companies in the MS Exchange ecosystem have merged:

  • Azaleos, founded in 2004, provides remote monitoring and management services for Exchange.
  • M3 Technology Group, founded in 2002, is a system integrator specializing in Exchange and Active Directory.

The announcement was made on March 16, 2009. The new company will be headed by the current Azaleos management team and will trade under the Azaleos brand.

Products, Facilities, and Competitors:

  • Combined Azaleos/M3TG is essentially Azaleos as before, with its Exchange remote management services, but with an expanded set of managed services and much stronger professional services.
  • Azaleos has more than 70 customers, and M3TG has a similar number. Customers include Chiquita, Alcon, Wendy’s/Arby’s, and Extended Stay.
  • Azaleos has its own monitoring and management software whereas M3TG used MS System Center.
  • Two NOCs, in Seattle (Azaleos) and Charlotte, NC (M3TG).
  • Main competitors are big systems integrators such as HP, EDS, IBM Global; Exchange hosting firms; and the status quo where customers continue to maintain their own on-premises Exchange systems.

Trading Performance:

  • Combined business has around 130 people.
  • Ferris Research estimates revenues of the combined business at $15M-$20M.
  • Azaleos and M3TG have seen year on year revenue growth but neither company has been trading profitably.
  • Ferris Research does not anticipate profitability in the near term.

Funding History and Transaction Summary:

  • Azaleos has had three funding rounds, the third in late 2008, totaling about $17M. We do not have any details for M3TG, but it appears they have had at least two funding rounds, perhaps on the order of $2M.
  • Azaleos received VC funding from Ignition and Second Avenue Partners and M3TG from Frontier Capital and Ed Crutchfield.
  • Deal based on a share exchange; no cash has changed hands. Azaleos shareholders clearly hold the majority of shares in the combined company.

Investor and Management Motivations:

  • They consider that the greater resources of the combined businesses will help attract more and larger customers.
  • M3TG's professional services and Active Directory expertise significantly enhance Azaleos's remote management capabilities.
  • Ferris Research believes that M3TG was financially distressed.

Ferris Research Comments:

  • It may be that the greater resources of the combined team will make it easier to garner large organization business and also to achieve profitability.
  • Azaleos's original business was to sell a remotely managed Exchange appliance; the market for this was limited and now its revenues are dominated by pure services.
  • Where organizations outsource Exchange support, they typically do so to large integrators, and where Exchange support is simply one aspect of a much larger contract. Azaleos and M3TG both are at a disadvantage in that they can only address a small part of such broad application portfolios. The merger will not resolve this competitive disadvantage.
  • It is now becoming practical to outsource Exchange to remotely hosted Exchange servers, through such major offerings as Microsoft Exchange Online. This presents a longer-term threat to Azaleos.
  • Azaleos/M3TG is a services business. These do not require a lot of capital, and should be able to grow organically. Thus we suggest that Azaleos/M3TG should perhaps cut its costs and get into profitability soon. That's healthy for a services firm.
  • All in all, the merger is a good step for Azaleos and helps build out an attractive services offering.

Points of Disagreement with This Bulletin:

  • Azaleos disagrees that big systems integrators (e.g., HP, EDS, IBM Global) are major competitors. VP Marketing Scott Gode says, "Companies frequently tell us before signing that the precise reason why Azaleos is interesting to them is because we are not a large SI/outsourcer and that they explicitly don't want to give all of their business to one company. Additionally, we supply our service to IBM who resells it under their brand."

... Mike Stackpoole and David Ferris


Latest Buzz ... Email Archive Migration: Plan for Stubbing

We hear that Kazeon is in acquisition talks with Symantec. Any further information is welcome--please contact David Ferris at david.ferris@ferris.com or +1 415 367 3436.

Below are various active gossip threads on current events in the industry. To contribute information, follow the appropriate link or see our Gossip page for other vendor threads.

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About Ferris Research

Messaging. Collaboration. Compliance. Ferris Research analysts bring more experience in these areas than any other firm. Period.

Major areas of interest are email, archiving, e-discovery, information leak prevention, unified communications, instant messaging, SharePoint, and mobile communications. We help:

  • IT staff evaluate, implement, and maintain these technologies
  • Vendors understand the marketplace and its technologies; explain their products or services to the marketplace; and find strategic partners, raise funds, or sell their company
  • Investors find and evaluate investment opportunities

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

  • Clients include many of the world's largest organizations as well as computer vendors from major corporations to small startups.
  • We have published more than 200 formal reports and 1,100 short bulletins.
  • Our news service has approximately 10,000 readers and covers more than 2,000 highly specialized announcements annually.
  • Our research team shares 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, where they're going, and their value.

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.

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