MessageLabs Buy a Headache for Symantec?

Symantec’s acquisition of MessageLabs for about $695 million in cash may give it indigestion, analyst David Ferris of Ferris Research said in a conference call today.

“The company may lose focus; it happened with Symantec (NASDAQ: SYMC) before when they bought BrightMail, which lost a lot of its momentum as a result of the merger,” Ferris said. “Also, mergers are really tough to do.”

Ferris also said that Symantec would have to cut MessageLabs staff, and that MessageLabs technology is “no longer leading edge.” And he added that Symantec would have to figure out what to do with technology MessageLabs OEM’d from other vendors.

Jeff Hausman, vice president and general manager of the Symantec Protection Network, dismissed Ferris’s fears.

“David Ferris has not been briefed by either company on the announcement or, in many months, on their products,” Hausman told “We are not sure what his views were guided by and they do not seem in line with other analysts.”

About BrightMail, which Symantec bought in 2004 for $370 million, Hausman said that “our leadership with BrightMail is very strong and is doing very well,” and added that the BrightMail technology has been embedded in MessageLabs’s e-mail protection solution for some time, so “their customers are already using BrightMail.”

On cutting staff, Hausman said Symantec will create a new product group focusing on software as a service (SaaS) that will be led by the CEO of Messagelabs, Adrian Chamberlain. “MessageLabs’s management team is very seasoned, and we’re retaining them to help guide our endeavors and boost our capabilities in the SaaS space,” he added.

The “vast majority” of BrightMail’s product development staff “may not be impacted,” Hausman said, and, while administration staff will be more impacted, “it’s too early to tell you what will happen.”

Dealing with the question of MessageLabs’s technology being outdated, Hausman said “we take into account the capabilities of the organization we’re acquiring.” As for other vendors’ technology embedded in MessageLabs’s products, Symantec has no plans to make any changes, but, “over time, we’ll evaluate what technologies are appropriate and required.”

An Opening for Competitors?

Some of Symantec’s competitors think the MessageLabs acquisition opens up the market for them.

“The acquisitions that have happened over the past three years — Google (NASDAQ: GOOG) buying Postini, Cisco (NASDAQ: CSCO) buying IronPort and now Symantec buying MessageLabs — have narrowed the managed e-mail space to three major players — Symantec, Google and MX Logic,” Pete Khanna, president and chief operating officer at online security services vendor MX Logic, told

“The last time Symantec bought BrightMail, one of our competitors, it went into a black hole,” Sandra Vaughan , senior vice president of marketing at unified e-mail security vendor Proofpoint, told “We thinks this only helps our business.”

MessageLabs OEMs Proofpoint’s e-mail archiving product, and Vaughan is not sure how this relationship will be impacted by Symantec’s purchase of MessageLabs. “It’s difficult to say what will happen,” she added.

Symantec arch-rival McAfee would only crow about its leadership when asked for comment. “The announcement to acquire MessageLabs, a company offering web and email security, comes only a couple of weeks after McAfee announced the agreement to acquire Secure Computing, a market leader in that very space,” a McAfee spokesperson told in an e-mailed response to a request for comment. “We are pleased that our strategy is so sound that the competition follows our lead.”

McAfee bought Internet security company Secure Computing for $465 million in cash last month.

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