News of this acquisition is not really a major surprise as Google had been utilizing Postini’s hosted anti-spam solution for some time as part of their Gmail offering. Postini built a great business over the years and was contemplating an IPO. Here’s a good deal summary from alarm:clock and one from Ryan McIntyre of Postini investor Mobius Venture Capital. Even Fred Wilson has his wish list of new features (note how they all deal with managing the queue of filtered inbound email as you read below).
What is a bit of a surprise is the rationale and positioning around the deal. Here is what Dave Girouard, head of the Enterprise business, had to say:
"Larger enterprises, however, face a challenge: though they want to deliver simple, useful hosted applications to their employees, they’re also required to support complex business rules, information security mandates, and an array of legal and corporate compliance issues. In effect, many businesses use legacy systems not because they are the best for their users, but because they are able to support complex business rules. This isn’t a tradeoff that any business should have to make."
"Business rules, information security mandates, and compliance issues" are a whole different world than search, adwords, and ad revenue business models. Google is certainly a force to be reckoned with and with their enterprise business being only 2% or so of their total business they have growth on the mind. Dave goes on:
"We realized that we needed a more complete way to address these information security and compliance issues in order to better support the enterprise community."
Postini provides a great hosted anti-spam/anti-virus service. Turn it on and bad stuff stops arriving in your inbox. However, larger enterprises are reluctant to trust their outbound messaging stream and, in many cases, their archiving to hosted solutions. Zantaz, a hosted provider and recently acquired by Autonomy, acquired EAS some time ago in order to have a deployable software in addition to their hosted service. Will the enterprise embrace Google for information security and compliance? If at all, I would say more probable for the small/mid-market than larger enterprises but time will tell.
We have examined hosted/SaaS offerings in the past and find pretty consistent feedback that there is comfort on the inbound side with trusting a 3rd party service to filter mail, but reluctance on the outbound side, technical/behind the firewall challenges associated with doing it for internal mail, and varying levels of concern about hosting email archiving. Again, smaller companies may have a different take but this represents the enterprise mindset from my perspective. Here’s some additional thoughts on it from Roger Matus who runs another company in this space.
Updated:
Michael Osterman does a good job of touching on the privacy and security dimensions of the deal.


