Microsoft to buy e-mail managed services company

Microsoft Wednesday bolstered both its managed services and messaging security investments with plans to acquire FrontBridge Technologies, a company that provides managed services for e-mail security, compliance and availability, executives from both companies said.

The terms of the deal, which the companies expect to close before the end of September, were not disclosed. Microsoft plans to integrate Marina del Ray, Calif.-based FrontBridge and its 160 employees as part of the Exchange Server Group, said Dave Thompson, corporate vice president of the Exchange division at Microsoft.

FrontBridge provides managed services to ensure a company's messaging infrastructure is secure, that its e-mail is always available and that e-mail archiving requirements are compliant with current government regulations, Thompson said. These services are in line with key demands Microsoft customers have made about their e-mail and messaging services, he said.

"There are basically two major dimensions that are critical to all customers," Thompson said. "E-mail has to be always available and secondly, and more complex, there are environmental factors that make it hostile in terms of virus attacks and spam, [which is] a challenge for compliance. You have to archive and store e-mail for certain types of business regulations, and to do this you need to protect the information flow with policy."

Industry analyst Matt Cain said that providing what he termed "e-mail hygiene" products and services is popular at the moment, and Microsoft and more traditional security companies are especially interested in cashing in on the trend.

"There is an intense need for e-mail hygiene services that's growing all the time," said Cain, a vice president with research firm Gartner Inc. "It's certainly a hot market, and we do expect further consolidation."

Symantec Corp. recently bought two companies in this space, Brightmail Inc. and TurnTide Inc., he added. Other companies providing similar products and services include Tumbleweed Communications Corp. and CipherTrust Inc.

While Microsoft is building this kind of technology into the next version of Exchange, code-named Exchange Server 12, the company also wanted to give customers the option of having these services hosted and managed for them rather than having to build out a secure messaging infrastructure themselves, Thompson said. Exchange Server 12 is expected to be released in the second half of 2006.

"We realized it was important for customers to have choice, that for some the solution that might be best for them was to have a managed service that runs certain pieces of e-mail infrastructure on their behalf," he said.

Indeed, Gartner's Cain said that providing secure messaging and e-mail archiving services in a hosted way is "turning out to be particularly attractive" for companies.

Selling managed services in general is becoming increasingly popular, with many major vendors and services providers embracing the business model as a way to give customers alternative ways of managing their software and hardware infrastructure. An entire crop of new companies called managed services providers has emerged over the past several years that focus exclusively on selling these services.