Microsoft Pulls In FrontBridge

Microsoft Corp. (Nasdaq: MSFT) has snapped up privately held FrontBridge Technologies Inc. for an undisclosed fee, in a bid to consolidate more functions within Exchange (see Microsoft Acquires FrontBridge).

FrontBridge, of Marina Del Rey, Calif., offers a range of managed email services through a network of eight data centers dotted around the world. The services include message archiving, disaster recovery, virus scanning, and spam filtering (see FrontBridge Launches Active DR).

Microsoft plans to integrate access to FrontBridge services into its Exchange Server and aims to offer the startups managed services via its network of Exchange partners.

Microsoft's move is a one-two punch to beef up Exchange. On one hand, Microsoft's choice is focused on email archiving; on the other, virus and spam protection.

Per archiving, Microsoft hopes to sell more to companies wrestling with the demands of regulations such as Sarbanes-Oxley and the Health Insurance Portability and Accountability Act (HIPAA).This is a hot market, and Microsoft's entry will no doubt shake things up. Several other service providers with their own email archiving software offer direct competition to FrontBridge, including Fortiva Inc., Iron Mountain Inc. (NYSE: IRM), IronSentry Inc., and LiveOffice Corp. A separate group of providers offers services based on other vendors' wares. And there's no shortage of packages for do-it-yourselfers (see Email Archives Arrive and Outsourcers Beef Up Email Archives).

Microsoft's also building on demand for services that filter spam and viruses from corporate email. Here, it's coming up against the likes of Symantec Corp. (Nasdaq: SYMC), which purchased Brightmail last year for $370 million; IBM Corp. (NYSE: IBM), which offers services through a deal with MessageLabs Ltd.; and Postini Inc. (see Symantec Buys Brightmail , IBM Looks to Clean Up the Inbox, and Postini Launches Anti-Spam Service).

With all these services on offer, why did Microsoft pick FrontBridge? For one thing, it wants FrontBridge's sizeable customer base. A FrontBridge spokesman confirmed to Next-Gen Data Center Forum that the company has racked up more than 3,000 customers since its launch in 1999. “We have got customers across the board,” he says, including such big names as Lehman Brothers, Reebok, and Electrolux.

FrontBridge is also big on security. Besides spam and virus filtering, it provides encryption and policy enforcement. This resonates with Microsoft's security focus. During his keynote at the RSA Conference in San Francisco earlier this year, Microsoft chairman Bill Gates promised a slew of new products and explained that a third of the company’s $6 billion R&D budget is spent on security technologies (see Gates Opens Up on Security and Gates Talks Security at RSA).

FrontBridge has been hip to the trend toward secure email archiving. It originally raised $28 million as a provider of virus scanning services for email. Last year, it purchased tiny MessageRite Inc. for an undisclosed sum, adding the archiving piece (see Spam Blocker Chomps Email Archiver).Industry watchers expected Microsoft to open its M&A wallet after its acquisition of Sybari Software Inc., another messaging security specialist, earlier this year. However, it was initially assumed the company might go for a pure-play vendor -- a firm specializing, for example, in just anti-virus products (see Microsoft Snaps Up Sybari and Microsoft Acquires Sybari).

All of FrontBridge's management team, including CEO Steve Jillings, will join Microsoft. But it's not yet clear how Microsoft will deal with the rest of FrontBridge's workforce of 160 employees and its network of data centers. Both companies are waiting until after the regulatory review to create an integration plan.

— James Rogers, Site Editor, Next-Gen Data Center Forum, and Mary Jander, Site Editor, Byte and Switch