Here’s an update on email and Web hygiene SaaS vendor MX Logic:

• SaaS offering:
  • Virus/spam/malware control for email
  • Email archiving
  • Email disaster recovery/continuity
  • Web malware filtering
• Main competition: Google/Postini and Symantec/MessageLabs.
• Competitive strengths: value pricing, ease of installation and use, strong reseller channel.
• Around 75% of sales are now through resellers; goal is to get 85% of revenues in 2009 this way, and ultimately to 90%.
• Company now spreading its reach internationally. Has good penetration in Japan.
• Financials: Privately held. Ferris Research estimates current revenue rate at $35M to $40M annually. VP Product Management Ryan Walsh says that the company has been profitable since February 2009.

Comments:

• The company has a big commitment to the channel, with some 1,800 partners. It expects almost all sales to be done by third parties, including sales to large organizations. That’s an interesting point of differentiation.
• It’s interesting that Microsoft’s anti-virus/spamware/malware SaaS offering isn’t the main competition. Microsoft has gone quiet in this regard over the last few years, presumably as it incorporates its FrontBridge acquisition.
• Another point of differentiation is value for money. MX Logic services are priced aggressively by its resellers. End customers often pay $1 to $3/user/month, depending of course on volume and mix of services.
• Given the current climate, it might be best if the recently achieved profitability can be maintained. That said, investment cash is available for pure startups and growing companies with a proven track record, so further fund-raising should be possible should MX Logic seek this.
• MX Logic has built its own cloud platform and feels its multitenant scalability is a major underlying strength. We see no reason to disbelieve this, although our knowledge of the platform is currently limited.

… David Ferris

SharePoint is a heavily browser-based experience. At times, that makes for a strange disconnect with one’s desktop-based experience. The most egregious example is that of email. To get an email into SharePoint, you have to extract the message, such as by dragging and dropping it onto your desktop. That makes an .msg file. Then, in SharePoint, you browse your computer to find the .msg file, you point at it, and it’s uploaded to SharePoint. Then you may wish to enter in metadata, such as who the sender is.

Colligo has a useful set of tools that enhance the SharePoint experience. The latest version, 4.0, has some interesting features:

• Contributor Uploader for Outlook. Lets you seamlessly transfer emails between Outlook and SharePoint.
• Attachment Manager. Lets you upload attachments seamlessly to SharePoint. The file is replaced, in the email, by a link. The document, now in SharePoint, can now be worked on by a group of people. That’s very useful.
• Contributor File Manager. This lets you use Windows Explorer to browse not just your desktop, but also the SharePoint workspace. Right clicking an item lets you do SharePointy things.

Normally, Colligo sells its Contributor suite in a bundle. Quantity one pricing for this is $179/seat for a perpetual license. Optional annual maintenance is 25%. Quantity one pricing for Contributor Uploader alone is $75/seat; Contributor File Manager alone is $125/seat. Volume discounts apply.

… David Ferris

GTB Technologies makes a data leak prevention product called GTB Inspector. It’s recently been revamped. Here’s a summary:

• Appliance dynamically scans all protocols and ports over a network link.
• Can log/quarantine/block/redact offending material.
• Policy-based encryption.
• Also scans endpoints; e.g., for downloads to detachable USB drive.
• Main competition: Symantec/Vontu, McAfee/Reconnex.
• Does real-time content checking so can catch material on the fly.
• Pricing: $20,000 for base unit, plus user pricing (e.g., $49.94/user for 500 users, $32.25/user for 10,000 users).
• Company is privately held.

Comments:

• The DLP market is still very small, despite plenty of hype. Most vendors have very small revenues. For example, one of the more visible players, Reconnex, was doing about $4M/year when it was sold to McAfee in late 2008. Ferris Research estimates that the market for DLP solutions does not currently exceed $100M.
• GTB was missed in the recent wave of acquisitions of DLP products, in which EMC/RSA acquired Tablus, Symantec acquired Vontu, Websense acquired PortAuthority, and more recently McAfee acquired Reconnex. Vericept and GTB are some of the independents left.
• CEO Uzi Yair believes the major strengths of the product are:
  • Greater accuracy than with competing technologies. This may very well be the case; with an hour’s demonstration of the product, we were unable to corroborate the assertion. If he’s right, this would be an important advantage. Inaccuracy is a major problem with today’s data leak prevention technology. We’re tentatively skeptical about the assertion of greater accuracy; we’d be delighted to be proven wrong.
  • The ability to block material in real time. Yair says his competitors can’t do this; they can only log offending material. We’re surprised at this, but if his assertion about the competitors is correct, we’d agree it’s an important strength.
  • The product scans all ports and protocols; Yair asserts, again to our surprise, that the competition doesn’t do this. If they don’t, they should.

… David Ferris

AtMail offers an email appliance:

• Provides POP/IMAP server, Webmail client, email archiving.
• Linux-based with open standard components.
• Pricing is a one-time license. Base product is $300; then per-user cost which is typically $0.10/user/year.
• Appearance can be customized.
• Professional services also available.
• AtMail is privately held, with no external funding, and is profitable. Ferris Research estimates revenues at $1M to $2M/year.
• Customers include ISPs, education, health care organizations.

Comments:

• You can see that this offering would be especially attractive to ISPs in developing countries, with extremely tight budgets. AtMail clients include ISPs in such places as Yemen, Rwanda, Pakistan, and often sends an engineer to customer sites for a week for implementation support.
• Your editor loves to go to developing countries and position with AtMail.
• This company sounds like fun. CTO Jason Brown lives in Montana, and CEO Ben Duncan likes to go off to the Australian outback with solar panels and satellite links. All the same, I bet they work very very hard.

… David Ferris

Exchange 2010 is the next version of Exchange Server. It is due for release at the end of 2009 or early 2010. Exchange 2010 includes many new features and enhancements for archiving.

It’s early days for Exchange built-in archiving, and storage management is an important area in which it falls short:

• It does not move archived email off the Exchange Server. Since email never leaves the Exchange Server, Exchange data protection, storage, and recoverability will all be adversely affected as the total Exchange storage increases.
• It (as well as all previous versions of Exchange) does not perform single instance storage across all of its stores. This means the email you archive in Exchange 2010 is not de-duplicated, which further compounds archive storage problems.

At last month’s TechEd, a Microsoft employee presented Exchange 2010 archiving and positioned the offering as a “personal archiving” solution and not an “organizational archiving” solution. This is correct. Today, an organizational archive must keep the archive data off-host, fully de-duplicated, and under full retention management.

Exchange 2010 archiving is a useful replacement for PST files and personal archiving. But it falls short of a true organizational archive solution. Today, only third-party solutions deliver all the features required.

… Bob Spurzem

Google Wave, recently announced by Google and available later this year, is important for messaging. The launch presentation is worth viewing by anyone interested in messaging.

Google Wave has an abstraction that seeks to replace both email and IM, and perhaps shared document editing too. Google argues that email was designed a long while ago, and that with modern technologies we can do much better. A converse argument is that email is a natural and basic electronic communication that evolved without design (much as soccer evolved without the need for formal rules or design). Things that really impress me about Google Wave are:

• The amount that can be done in the browser, in a way that is clearly browser independent. This is a long, long way from static HTML.
• The way that messages are shared as you type. (Scary, but really neat technology.)
• The use of XMPP (Internet Standard eXtensible Messaging and Presence Protocol) for federation. The need for getting XMPP (as well as HTTP) into the browser seems an increasing priority.

This is a technology to watch.

Desirability of a Multi-Vector UI

I watched my son using his iPhone the other day to exchange SMS with his girlfriend. The UI was modeled on iChat (Apple’s IM client), and it seemed a natural way to use SMS. My Nokia phone has an integrated messaging interface, and gives a uniform UI for SMS and email. I can see my SMSs with a listing pretty much like my email. The key observation is that UI can be remarkably independent of the underlying technology.

Under the hood, Wave is essentially “bboards on steroids.” It is a shared data structure to which multiple users can contribute. Having this will add to the list of things that I need to interact with.

What I would like is a single UI that deals with all of the underlying abstractions (email, IM, SMS, Wave) — a communicator that can present information in an appropriate manner and use whichever channel is appropriate. It would be good to decouple the UI from the transport more strongly.

Email Won’t Go Away

I often end up in interminable email discussions with multiple nested quotes of previous messages. Engineers seem particularly fond of this style. Google Wave seems to offer a much superior interface for this type of dialogue.

However, it does not seem a replacement for all email. Email can often be a highly transactional mechanism. When dealing with emails to external organizations and individuals, there will often be shared internal review of the message and a carefully worded response before it is sent. The sharing and dynamic nature of Wave does not seem appropriate for the external communication. Email as it stands seems to have uses for which it will not get replaced. It seems to remain a basic and essential communications building block.

Google Wave Won’t Be the New Desktop Client

For those with almost permanent access to fast networks, shifting to a Web-based communications option seems quite plausible. For those who travel on trains and planes, carrying your email world on your laptop remains highly desirable. The ability to use Google Gears to replace this seems pretty much a fantasy for now.

It also feels right to me that having an optimized tool (both in UI and protocol terms) for tasks that are done a lot (and I do email a LOT) seems sensible. If you have special communications protocols such as IMAP (Internet Message Access Protocol) and XMPP, why try to layer things over HTTP?

The lack of competition in desktop email clients is a problem. I use Outlook, which I think is the best option available, but it could do so much better. The lack of serious competition to Outlook is a real problem (and yes, I know about Thunderbird). Competition in the browser market has really improved things for everyone. We need a good desktop client. It is crazy that there is not a client that does efficient IMAP and XMPP with an integrated UI.

Google Wave does not provide an answer to this, but it certainly challenges all who are concerned with communications UI.

… Steve Kille

LiveOffice (cloud-based archiving)and Mimosa (on-premises archiving) announced an interesting collaboration:

• LiveOffice CloudMerge for Mimosa NearPoint lets Mimosa customers seamlessly push some or all of their on-premises archive into LiveOffice’s cloud-based archive.
• The upload-to-cloud interface is tightly integrated with that of Mimosa.
• The pricing is proportional to the number of mailboxes put onto the archive. It’s independent of the amount of storage used, and how long archived material is kept. Contact either of the vendors for detailed pricing.
• LiveOffice is profitable and privately held. 2008 revenues were $23M.

Comments:

• This is a good idea. It’s immediately valuable for Mimosa customers. It lets them:
  • Provide third-party access to the archive; e.g., to facilitate opposing counsel discovery, or to satisfy Freedom of Information requests.
  • Offload storage management to a third party. Storage technology is changing rapidly and is something of a pain to administer, so in principle the idea of offloading the job to a specialist makes sense.
• It’s a smart move by Mimosa. It lets the company deliver a short-term solution for this need. Longer term, presumably Mimosa will provide its own external-access solution.
• Most on-premises email archiving systems provide services to allow within-the-firewall access to the archive. They provide no, or poor, access for external third parties. A typical approach today is to filter out the required corpus, put it on a DVD, and FedEx out the disk. It’s labor-intensive, slow, and inflexible.
• The right way to provide external third-party access is clearly via a rich browser interface. Expect many on-premises archiving vendors to develop such solutions over the next two or three years.

… David Ferris

If you have ever accidently deleted a document from SharePoint, then you know how difficult it is to restore a single item from SharePoint. The cause of this problem is that SharePoint has a relatively weak backup engine and it does not give you the option of performing single-file restores from a backup. SharePoint document versioning does not help either. When you delete a document, SharePoint Server removes all version history.

New solutions for SharePoint archiving can be the answer to this problem. SharePoint archiving solutions capture SharePoint content at the item level and keep it secure in a central repository for search and compliance. Individual items in the archive can also be copied back to SharePoint to, in effect, serve for single-item restore. So a SharePoint archival solution delivers benefits for both archival and data protection.

A single solution for SharePoint archiving and data protection improves SharePoint manageability and reduces cost.

… Bob Spurzem

Red Gate’s Exchange Server Archiver is a new email archiving product. It’s strikingly easy to use:

• Works with Exchange Server.
• Outlook plugin.
• Search is very simple and straightforward.
• Main next elements of product roadmap are offline support and improved search.
• Pricing is $30/mailbox for perpetual license, plus optional 25%/year maintenance.
• Focus is on sales to SMBs with up to about 500 mailboxes.
• Focus is on storage management benefits rather than compliance.
• Main competition: GFI, metaLogic, Quest, Sherpa, Sunbelt.
• Red Gate is privately held. All growth has been organic, with no external financing. We estimate revenues at $25M/year.

Comments:

• The philosophy of the product is to offer a simple solution that meets the needs of SMBs, and to sacrifice all the bells and whistles that larger organizations need.
• The ease of use comes naturally from the streamlined feature set. For example:
  • Everything archived is kept forever, so there’s no need for retention policies.
  • Archiving policy can only be defined by size of email, and how long it’s been kept; e.g., “Automatically archive messages over 10MB that have been in the message store for over 3 months.”
  • Limited compliance support; e.g., no tagging.
• Based on a demo, we agree this product is exceptionally transparent for users. Product manager Elizabeth Ayer says that installation is very simple and we have no reason to disbelieve her.
• Things won’t be quite as simple for users as Red Gate thinks. There will be human factors to consider. For example, companies will need to apply homegrown tagging strings in subject lines to facilitate searches (e.g., “2007-TAX-ISSUE”), and ensuring they follow the procedure correctly will be lots of fun for management.
• Red Gate is an established vendor of database tools. It is good at selling these directly to IT staff in SMBs, over the Internet. Even though IT staff in SMBs are small, it’s unclear how much the goodwill Red Gate has among developers will influence the people who administer Exchange.

… David Ferris

SMS spam on cellphone isn’t much of a problem in developed countries, because senders get charged and it’s too expensive for the spammer. However, that will change:

• Spammers can send from developing countries where the charges are very low
• Spammers will sometimes work out ways around the system, where the recipient pays
• Developed countries have introduced “messaging unlimited” plans that lower the cost of sending

This constitutes a major problem for wireless providers, because SMS is a major source of revenues to them, unhappy users will (expensively) call the help desk, and it’ll increase churn.

Today, a number of vendors offer cellphone-based solutions for virus control, but no proper spam control solutions are available. Cloudmark has just come to the rescue of service providers with its Cloudmark MobileAuthority:

• Software that runs on service provider’s equipment
• Suppresses spam, phishing, fraud and viruses sent over SMS or MMS
• Main underlying techniques are the mainstream spam control mechanisms of sender reputation, content analysis, and human inspection

Other comments:

• Assuming the technology is reasonably good, which we expect, Cloudmark should do well with this offering
• In the US, which has been slow to adopt SMS, users perhaps receive two spams a year. In Europe, one SMS spam per week is typical. In India, you receive perhaps two SMS spam daily, in China it’s more like five to 10 daily
• SMS caught on first in Europe. It’s relatively new to the US, where it’s growing quickly. Jamie De Guerre, Cloudmark CTO, tells us some US operators are now carrying over one billion SMS messages per day and saw a 275% increase in volume in 2008 over 2007
• The state of the art of spam control among service providers today is primitive. The service provider maintains lists of spammy words; where these words are detectd, the message is suppressed. This isn’t good enough. It’s way too labor intensive to maintain, too much spam gets through, and too many valid messages are suppressed. It’s reiminscent of spam control in the early days of email-based spam
• There’s much more SMS spam than MMS. MMS is more of a problem for virus transmission

David Ferris

At one time, it appeared likely that the SyncML protocol would be the main way that you’d synchronize email, calendar, and address book information with mobile phones. However, SyncML has problems handling unreliable links, and has a lot of variations between vendors. It hasn’t taken off.

In the shartphone world, Microsoft’s ActiveSync is dominant, largely because business people need to communicate with Exchange. ActiveSync is based on SyncML, with a number of important improvements added by Microsoft. With its bundling in Apple’s iPhone, ActiveSync has consolidated its smartphone position.

Phone vendors would like to standardize on a single software architecture. Basic phones and feature phones have lesser capabilities than smartphones, but in the future, presumably they will contain much the same systems software as smartphones, with much of the software inaccessible. So ActiveSync could end up being the dominant force for synchronization right across the mobile phone spectrum.

On the other hand, it’s unclear if ActiveSync will be much supported on the server side (apart from Exchange lookalikes). CalDAV (an open protocol for group scheduling) could be an element of a more open sychronization solution; this is also supported by the iPhone.

… David Ferris, with thanks to MailSite’s CEO John Davies and Isode’s CEO Steve Kille for their input

Synchronica makes push email software for a very wide variety of mobile phones. The software is sold to service providers and includes closely related data like calendar and address items.

The company’s 2008 revenue was 60% up on 2007, to about $6.1M. Synchronica is focusing on working with major VARs/integrators who sell to service providers, to develop them as a channel. This appears to be working well. Part of the growth is due to acquisition.

Synchronica appears to be executing reasonably well. So why aren’t its revenues higher? In the enterprise space, this could be explained by competition from Microsoft’s ActiveSync and RIM’s proprietary synchronization. But Synchronica also serves feature and basic phones, which represent 90% of the market and aren’t affected by ActiveSync and RIM. Despite a long sales cycle, you would have thought Synchronica revenues would be higher by now.

Several possible reasons come to mind:

• The very long cycle from initial sales to customer-driven revenues, which occurs when a vendor sells to carriers and income is proportional to actual adoption.
• The core capability is based on SyncML. This looked promising at one time, but has been losing popularity among carriers.
• Many capabilities of smartphones will migrate to feature and then basic phones. This encourages synchronization to be done the way it is on smartphones: i.e., using ActiveSync and RIM’s protocol.

… David Ferris

Which hosted Exchange vendors will survive? After all, Microsoft is now offering its own version of hosted Exchange. And Microsoft’s offering is good, and very attractive.

Some will survive by competing on price. Most others will survive by competing on functionality; e.g., better service, or better integration with third-party tools such as BlackBerry, or better integration with industry-specific applications. Many of today’s hosted Exchange suppliers will disappear.

Current players that are likely to survive include Apptix, Intermedia, Rackspace, and USA.NET.

… David Ferris

Intermedia is a successful hosted Exchange vendor. We were recently updated by the firm, and the following may be of interest:

• Company believes it now has the greatest number of customers for full hosted Exchange--we see no reason to disbelieve this claim. These are seats for full MAPI running with normal Outlook along with all the rich MAPI functions (calendaring, tasks, shared folders, etc.), rather than users with just POP/IMAP access to Exchange.
• We estimate that Intermedia has about 200,000 such full MAPI licenses. Marketing VP Danny Essner estimates there may be a couple of million such instances of full hosted MAPI deployed. We’re inclined to agree, once you cut out trial/test accounts. It’s still very early days for hosted Exchange.
• Typical mix of hosted Exchange functionality includes BlackBerry access and spam and malware control; typical cost is around $16/user/month.
• Intermedia was the first hosted provider to support the beta version of E2010. That’s impressive--it helps to validate the company’s claim that its architecture helps it keep current with Microsoft. The main reason is that it doesn’t use Microsoft’s HMC.

… David Ferris

HP’s archiving has gone quiet for the last two years. During this time, the company has been mulling over its plans, and refining its marketing messages and internal sales and support procedures. Here’s a quick summary of the situation:

• Originally known as RISS, more recently as Integrated Archiving Platform (IAP).
• Currently supports Exchange (including calendar and task items, shared folders), Notes email, files, and databases.
• Future support planned for SharePoint, instant messaging, and ECM systems.
• Main reasons to buy: storage management (worldwide), plus compliance and e-discovery in U.S.
• Always sold as hardware and software bundle.
• Pricing:
  • The list price of the IAP base system, which provides up to 6.3TB of integrated storage, is $70,300 (includes the first year of maintenance support). The IAP is priced on capacity and object ingestion, the latter being the biggest variable between customers. The HP Email Archiving software for Microsoft Exchange or Lotus Domino is priced per user and sold in 500 and 10,000 license to use (LTU) increments. The first year of software support must be purchased.
  • For example, for 5,000 Exchange users, a system with 1GB of storage per user, and limited professional services, would list at about $400,000; i.e., $8/user. After the first year, 22% maintenance applies.
• Main competition: Symantec, Autonomy, Mimosa, CommVault, and EMC.     
• Most sales to enterprises are direct; most sales to medium-sized organizations (say 3,000 to 10,000 employees) are via resellers.

In our view, the most interesting aspects of the offering are:

• Integrated hardware and software solution, usually along with professional services.
• Scalability: up to 450TB, billions of objects, 100,000+ users, largely due to the underlying grid architecture and the built-in indexing and other storage intelligence.
• Fast query and retrieval, largely due to built-in indexing and other storage intelligence.
• Tight integration of software and hardware. This implies various benefits; e.g., more reliable retention policy implementation, more reliable chain of custody, and greater certainty about access controls.

… David Ferris