While sorting out a potential virus problem for friends recently, I noticed Symantec has purchased Brightmail, a high-flying anti-spam provider, for US$370 million. Company valuations reminiscent of the dot-com boom are back if you are an anti-virus and/or anti-spam company.
Brightmail had only just posted its first profit (US$1.2 million) in fiscal year ending January '04, with revenue jumping from $12 million to $26 million. Symantec had already invested US$18 million in Brightmail back in 2000 for an 11% stake. Apparently, Brightmail receives about 85% of its revenue from only 5% of its customer base, with Microsoft alone accounting for more than 10% of total revenue and the world's larger ISPs accounting for around 50%.
Microsoft is developing its own anti-spam software, as well as an anti-virus offering that will compete with Symantec. So, Symantec now has 370 million more reasons to cry foul when Microsoft properly integrates these solutions with its various operating systems and desktop and enterprise business software solutions.
I recall when one had to purchase expensive memory managers, defrag tools, PC interconnect, and a host of other utilities as third-party add-ons, just to get things done. They often didn't properly integrate, which caused many more headaches than I care to remember. Yet today, when Microsoft bundles some utility into its operating systems, it copes a lot of flak. That is why we don't already have excellent backup, defrag, anti-spam, anti-virus and other system utilities built into the operating systems instead of nothing or, at best, crippled versions.
The same people who complain that everything is not integrated correctly and have to remember numerous details to run a reliable, stable, and secure system also accuse Microsoft of being a powerful monopoly when it bundles a new utility or service that is already available from a third-party company. I hope Symantec isn't paying dot-com type prices because they think they can win the PR war and stop Microsoft from bundling anti-virus and anti-spam solutions into its operating systems anytime soon. Let's hope that common sense will prevail and Microsoft is allowed to do the right thing.