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7/13/2007
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How Google Could Be Gearing For Compliance As A Service

The acquisition of Postini hints at possibilities beyond hosted e-mail.

Compliance is a popular buzzword in IT, used to sell everything from servers to switches. To vendors of hosted applications, it usually has the opposite effect: IT managers would rather keep data safely behind the corporate firewall. Google's $625 million acquisition of messaging security company Postini, announced last week, may change that. Rather than be a barrier, compliance could emerge as a driver of software as a service.

Though Google hasn't outlined how it will assimilate Postini, the first integration likely will be with the business version of Gmail. Postini started as an anti-spam vendor, and most of its customers, Google included, route their e-mail through its servers. Hosting e-mail servers is a step, but Google's enterprise ambitions go beyond e-mail. So do compliance mandates. Google wants a share of Microsoft's Office suite market, and Postini's technology can be applied in that pursuit.

Postini Profile
Founded in 1999, Postini is based in San Carlos, Calif., and has 35,000 business customers and 10 million users
Its Web-based Communications Suite can encrypt and archive messages and enforce corporate communications policies
It processes 1 billion messages daily, 85% of which are blocked as unsolicited or malicious
There are technology and business reasons that make compliance a big selling point for Web-based apps. Most Web apps already stack up well against locally installed software in versioning and change tracking, so they're well suited to strict compliance mandates. Google's search capabilities could aid in e-discovery. On the business side, many managers would love to pass the buck for keeping up with regulations.

In addition to economies of scale, there's safety in numbers: Most regulations mandate outcomes rather than specific technologies, so choosing an ASP with a long list of customers that haven't been prosecuted ensures something approaching best practices.

THE HURDLES
Compliance isn't the only obstacle to widespread use of Web apps. They don't yet duplicate all of Microsoft's functionality, but most Office customers aren't power users of Excel, and hosted app providers are innovating rapidly. Startups like ThinkFree and Zoho are ahead of Google here and could be attractive acquisition targets for larger vendors. The biggest problem is that Web apps need an Internet connection.

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ThinkFree and e-mail vendor Zimbra have adapted their apps to work offline, while Adobe's AIR and Google's Gears look set to become de facto standards. Freed from the Web, such apps function much like their locally installed counterparts, except that they automatically synchronize with a Web service--ensuring that data files are backed up and software is up to date. Enterprises can achieve something similar in-house using application streaming platforms from Altiris, Citrix, or Microsoft's SoftGrid, which require servers. Google may be able to offer this as a service, too, thanks to its May acquisition of security company GreenBorder. Though GreenBorder pitched its product as a way to protect Windows from Internet downloads, its underlying technology is application virtualization, the same thing that powers streaming.

The privacy concerns that Google's consumer services raise are real, though they're mostly a result of its targeted advertising business model. Corporate customers can avoid data mining by paying in cash instead of eyeballs. Salesforce.com proves that companies are willing to let an ASP guard some of their most valuable data, and Postini's own customer list gives Google 35,000 businesses that already see no problem with letting a third-party service scan their e-mail.

Even enterprises that prefer to do everything in-house can learn from hosted app providers, as vendors already are. BEA Systems' pitch for its social computing software, which launches this week, is almost identical to that of Google and enterprise-focused Web 2.0 startups: People have become accustomed to rich Internet applications in their personal lives and want to use the same technologies at work. Yahoo and Google already beat most enterprise mail systems in search and storage features, leading many employees to use them at work, even if it means violating company policy or even federal law.

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