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Microsoft Aims to Acquire FrontBridge Technologies

Microsoft agreed to terms Tuesday night to acquire FrontBridge Technologies, a provider of hosted e-mail security, compliance and archiving services, the companies announced Wednesday afternoon.

Assuming regulatory approval, Microsoft hopes to sell the FrontBridge services as a complement to its Exchange messaging server in the near term and later integrate its on-premise Exchange server with the hosted technologies.

FrontBridge, based in Marina del Rey near Los Angeles, is a privately held company, and terms of the deal were not disclosed. The company has about 160 employees and claims about 4,000 customers. Analyst firm Gartner estimates the company's annual revenues are in the range of $25 million. Microsoft hopes to close the deal in the third quarter.

"We are super excited about this because when we are out talking to our customers, the key pain points that they tell us about are the things that FrontBridge has a solution for," said Kim Akers, general manager of Exchange marketing at Microsoft.

FrontBridge brands its messaging services as Total Message Management and breaks that into three main areas -- Message Security, Message Compliance and Message Continuity. Security consists of managed anti-virus, managed anti-spam, policy enforcement and managed encryption. FrontBridge's compliance includes e-mail and instant message archiving, compliance reporting and policy enforcement again. The company's continuity services encompass business continuity, disaster recovery and mailstore management.

The breadth of FrontBridge's offerings are one of the reasons that Microsoft pursued FrontBridge out of a fairly broad field. A recent Gartner report named 21 companies offering some component of the email security boundary services that FrontBridge offers.

"When you look at some of the other competitors out there, most of them don't have as wide a range of offerings. They might have anti-virus or anti-spam but not compliance," Akers said. She added that discussions with FrontBridge customers revealed a high level of customer satisfaction and that Microsoft was impressed with the FrontBridge management team and with the company's five-nines uptime guarantees, which are backed up by a globally load-balanced server infrastructure.

Analyst Matt Cain with Gartner gave Microsoft high marks for the deal. "It's a very smart move. This is a very dynamic market, and there's a lot of opportunity for growth. I think it highlights the vast demand for e-mail hygiene solutions in general if you throw in the need for compliance and e-mail recovery."

According to Cain, the current leaders in the hosted market are, in order, Postini, FrontBridge and MessageLabs. "[Microsoft is] aiming pretty high, but recognize we're really in the infancy of this market," Cain said.

Some of the areas where Cain sees promise for integrating FrontBridge services with future versions of Exchange could come as soon as Exchange 12, the code-name for the next version of the server. "You might have the ability to use reputation scores from FrontBridge at a local level in the Exchange Edge Server," Cain said. "Or you may have additional failover links between the Exchange server and what's in the cloud."

Even as Microsoft plans to integrate Exchange with FrontBridge, the messaging company's co-founder and vice president for business development, David Cohen, says the service's multi-platform character will be maintained.

"All of those are done in an agnostic way," Cohen says of FrontBridge's services. "Microsoft is supporting that going forward."

Gartner's Cain also sees no cause for immediate alarm among FrontBridge's customers, 80 percent of whom he estimates use FrontBridge with Exchange already. "I think there's no short-term danger over the next two years."

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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