Sonian Buys Webroot E-mail Archiving Business

Cloud-based security vendor Webroot, which is exiting the e-mail security market to focus on anti-malware services for mobile devices, has sold its archiving business to Sonian, which expects to add 1,000 customers as a result of the transaction.

The acquisition expands Newton, Mass.-based Sonian's customer base to roughly 9,500 businesses, located mostly in the Asia-Pacific region, the U.S. and Europe, Jeff Dickerson, president and chief executive of Sonian, said Thursday. Sonian, which depends on the channel for more than 95 percent of sales, expects to eventually boost the number of channel partners from 175 to about 300 as a result of the purchase. Financial terms were not disclosed.

"Our focus and our bread and butter is the channel," Dickerson said.

Webroot is in the process of jettisoning its e-mail security business in a reorganization that will direct the Broomfield, Colo.-based company's resources toward selling and developing cloud-based security services for companies' laptops, desktops, mobile phones and tablets, CRN reported Wednesday. Webroot, which is an investor in Sonian, had sold the company's cloud-based e-mail archiving service over the last two years under its own brand.

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Sonian leases its cloud infrastructure through another investor, In 2011, Sonian more than doubled its customer base, Dickerson said. He expects to end this year with 20,000 customers worldwide.

Sonian pays resellers the first three months of revenue from the first year of a contract for referrals. Resellers that prefer to own the customer, handling sales and support, can get as much as a 50 percent discount on Sonian services, Dickerson said. Because Sonian is a cloud-based service, resellers have recurring revenue for the lifetime of a contract. "We have a 99.9 percent renewal rate," he said. "The stickiness of our offering is spectacular."

Dickerson said Sonian doesn't release revenue figures.

Webroot reseller Blended Systems, Jonesboro, Ga., is currently moving e-mail security customers to Postini, a comparable service from Google. Bob Stevens, president of Blended, said he has had no problem keeping Sonian for those customers that want to continue with the service. "We have added additional seats for some users since the transition and it is quite easy working with the crew at Sonian," he said.

The e-mail archiving business, on-premise and cloud-based, is expected to nearly double by 2015 to $4.8 billion, according to market researcher The Radicati Group. On-premise archiving dominates the market at 73 percent, but is growing much slower year to year than cloud-based services. Large vendors have taken notice of the trend. Symantec announced this week that it had acquired archiving service LiveOffice for $115 million.

While Sonian started with e-mail archiving, the company's ambitions go much further. It expects to grow its business in file and document storage, Dickerson said. "The amount of data sitting in a file format is pretty staggering," he said. "We offer our channels multiple ways to reach back into a customer and provide a service at a nice profit."

In entering the so-called endpoint security market, Webroot faces much larger companies, such as McAfee, Symantec and Trend Micro, which account for about 60 percent of the enterprise market today, down from 85 percent in 2007, according to Gartner.

The three market leaders have been losing share through increasing competition for smaller companies with less than 1,000 seats, according to Gartner. Sophos and Kaspersky Lab have benefited the most from this trend. The lower end of the market is where Webroot will be slugging it out.

The endpoint security market was about $3 billion at the end of 2010. Growth rates in 2011 and this year are expected to be in the 5 percent range, Gartner said.