Symantec Buy Sends Instant Message

With its acquisition of instant messaging management startup IMLogic, Symantec acknowledged what users and analysts have said for for months: IM use is growing rapidly, and so are its security risks. (See Symantec Buys IMlogic.)

Symantec moved late Tuesday to acquire one of three primary IM management companies. The deal was no surprise: Symantec and IMLogic already had several technology partnerships, Symantec is highly acquisitive, and IMLogic fills a hole in its product line. Symantec and rivals like Computer Associates and McAfee handle security features such as antivirus and antispam and email management but left IM management primarily to startups IMLogic, Akonix, and FaceTime. (See Startups Tame IM Beast and CA Buys Archiver.)

Symantec did not disclose the sale price, but industry sources peg the cash acquisition between $65 million and $100 million. Thats peanuts for Symantec, which paid $11 billion for backup software giant Veritas last year and $370 million for email security firm Brightmail in 2004. (See Symantec & Veritas: It's a Deal and Symantec Buys Brightmail .)

The combination of IM management and security was overdue, according to users who recently identified IM security as a major security challenge. (See Startups Tame IM Beast.) Market statistics show IM use is growing like a weed. According to market research firm The Radicati Group, the average number of IMs sent per user per day will increase from 37 in 2005 to 94 IMs in 2009. And the increase will come primarily from business use. By 2009, the percentage of consumer-only IMers will drop to 4 percent from 70 percent in 2005, according to Radicati.

From a financial standpoint, IDC forecasts the enterprise IM market to grow from $315 million in 2005 to $736 million in 2009 -- including IM security, management, and compliance products.And with new users comes greater potential for hacking. The Symantec-IMLogic deal was made public hours after Akonix identified a new IM worm that can spread the recently discovered Windows Meta File (WMF) vulnerability that Microsoft is working to fix. And IMLogic Tuesday also identified 241 new ILM threats that come mostly in the form of worms and viruses.

Bill Maguire, former CIO of contact center software firm Aspect Communications, used Akonix IM management at Aspect and in his former job at Legato Systems. He says IM management is a big issue both from a security and retention standpoint.

“Say you have engineers and marketing people using IM. When they’re using AOL or Yahoo, that is over the bare wire,” he says. “If anybody wants to probe what a company’s doing, if there’s no real management of IM, anybody who wants to probe what a company’s doing, they can find out very easily. Then, if your controller or CEO exchanges IMs with the accounting firm that’s doing your audit, those messages have to be retained as part of email retention under Sarbannes-Oxley."

Radicati analyst Matthew Anderson says security firms are finally paying proper attention to IM.

“I think more attention could have been paid before, as things were left to IM management companies in the past,” Anderson says. “But I would expect to see IM as a whole loom larger in the corporate focus in the near future.”After the deal closes -- probably next month -- Symantec and IMLogic will work to combine their products. Although the companies didn’t give many product details, they did say IMLogic technology will be integrated into the Enterprise Vault email archiving product that Symantec picked up when it acquired Veritas last year. (See No Brainer: Veritas Buys KVS.)

“I would expect Symantec to eventually offer an inclusive security package which would also cover IM,” Anderson says. “Instant messaging is really taking hold amongst business users, and organizations are looking to secure their IM networks.”

Anderson and others in the industry say Symantec’s deal may start a trend, perhaps continuing with Computer Associates and McAfee grabbing one of the other startups.

“That’s a logical conclusion,” Akonix CEO Pete Shaw says, “but we’re looking at a very large market opportunity and we are just at the beginning of it. I’m surprised that IMLogic would sell as early as they did.”

Still, Shaw says Symantec’s acquisition of IMLogic will likely raise the bar for its rivals: “McAfee and CA also have security suites, and none offer IM. Will they add IM capability over time? I think they will, whether it’s through acquisition, building their own, or licensing somebody else’s software.”Maguire agrees: “I thought something like this was inevitable for a long time. It’s a lot easier for an IT shop to get an integrated solution instead of putting all the pieces together.”

— Dave Raffo, Senior Editor, Byte and Switch

Organizations mentioned in this article: