Tumbleweed Communications Corp is in the market to buy a company offering email archiving as a managed service, the idea being to bundle onto its platform some of its own technologies such as inbound threat protection and secure file transfer for a broader SaaS offering.
Jim Scullion, who took over as CEO of the Redwood City, California-based company in January last year after a disappointing 2005 under his predecessor, said the acquisition will be part of a deepening and widening of its messaging security activities.
These started in outbound email security to which it added inbound through internal development, barring anti-virus and anti-spam, where it OEMs both Kaspersky and McAfee. In 2003 it added secure file transfer though the acquisition of Valicert, which also brought it an identity validation product, Validation Authority. Tumbleweed also has a third area of business with encryption software, though Scullion said this is now more of a feature on the overall platform than a standalone.
He said the rationale for acquiring one of the handful of companies offering email archiving as a service is that we went to about 500 of our 2,500 customers over a period of six months to develop our deeper messaging security strategy, and they told us they want to buy less best-of-breed point solutions and more from a few strategic partners like Tumbleweed.
On the list of things these customers said they wanted from Tumbleweed was email archiving, which Scullion said would be part of a hybrid of hosted-in-the-Cloud and on-premises solutions. While it has the on-premise software and appliance offerings for in- and outbound threat protection and secure file transfer, it does not currently offer them as managed services, so the acquisition of an email archiving service provider would also give it the platform for that purpose.
We want to acquire a hosted platform in email archiving and e-discovery that can be leveraged to host other parts of our portfolio, he said, adding that Tumbleweed will go for the mid-tier market rather than enterprise. He defined the mid-tier as companies between 500 and 5,000 employees.
However, Scullion said there is no intention to offer on-premise email archiving, not least because that would entail going up against heavyweights such as Symantec (which got the KVS technology via its acquisition of Veritas) and EMC (which has been beefing up its offering based on Legato), not to mention Zantaz (who bought Educom) and Open Text (that acquired Ixos).
As to the funds for such an acquisition, Scullion said Tumbleweed, which reported revenue of $62m for its last financial year and is non-GAAP profitable, has $30m in the bank and no debt. We’ll use a combination of cash and stock to buy [them], he said, adding that the acquisition will take place this year.