It was interesting to see the acquisition of Postini by Google announced today. Major props to the Postini team. They championed the infrastructure in the cloud model long before the industry leaped upon the SAAS (software as a service business) theme, developed a kick-butt service, and earned their payday. We started looking as Postini at Merrill Lynch early in their lifecycle (a move championed by Andy Brown and Dave Bauer at Merrill, both of whom are as sharp as they come). We became an early flagship customer, and they delivered the goods to us (making our SPAM issue effectively become a non-issue in a month).

Postini subsequently continued to expand their market offerings to address other services (IM message support, archiving services, etc.), and build a really great A-list customer base. Google’s acquisition of them is interesting – I wonder how they envision deploying the acquired technology, and how stand-alone Postini will be as a business. Perhaps they will morph into the sale arm for all paid services to businesses (including Google Apps, the corporate search business, and maybe even Grand Central). I don’t necessarily see this purchase as filling a gaping hole in existing Google experiences – I find the SPAM filtering for GMail to be pretty decent – so I anticipate it being much more of an additional external market offering. It’s an interesting acquisition at a fully-valued pricetag, so there has to be a pretty buttoned up plan for the entity. I also wonder if the GreenBorder deal done a while ago weaves together with this into an overall thrust to get more legitimized corporate penetration (or becomes a great free security offering to the consumer market).

The thing that bugs me is the lost opportunity for Microsoft. This was such a logical acquisition for them, but they opted for Frontbridge instead of the market leader. They really want to shift more of their business to an annuitized revenue model (away from only product sales with maintenance deals), and acquiring the hosted security services of Postini’s would have given them a jumpstart on their efforts 2 years earlier than their mid-2006 release of Exchange Hosted Services (EHS). I’ve had dialogs with senior folk at Microsoft on the managed service plays, and other than OneCare (which is a total consumer play), I don’t see much movement by them beyond last year’s Exchange Hosted Services announcement, which is a shame. Perhaps this acquisition by their arch-enemy will be a further catalyst…