Key Points:
- Postini provided email filtering, web security, and archiving services from 1999 to its shutdown in 2015
- Founded by 4 entrepreneurs in 1999, it rapidly grew to filter 2.5 billion emails per week by 2005
- Google acquired Postini in 2007 for $625 million to absorb its services into Google Apps
- Transition took 8 years, with some controversies, before Postini services fully shifted over by 2015
The Founding of Postini
In 1999, entrepreneurs Shinya Akamine, Gordon Irlam, Brian Maggi, and Scott Petry founded Postini in Redwood City, California. The startup offered businesses and individuals innovative email filtering, web security, and archiving services.
With funding from venture capital firms like August Capital and Sun Microsystems, Postini quickly took off. By 2005, just 6 years after its founding, Postini was filtering over 2.5 billion emails per week across 4,000 companies and 6 million end users. It moved its headquarters to San Carlos, California to accommodate rapid growth.
Pre-Acquisition Growth and Success
Between 1999 and 2007, Postini experienced tremendous growth:
- 10 data centers in U.S. filtering 2.5 billion+ emails per week by 2005
- Web security services protecting over 4,000 companies by 2005
- 6 million end users across industries like finance, retail, and more by 2005
- Doubled data centers and tripled customer and user base from 2005-2007
This exponential growth was fueled by the novelty and quality of Postini‘s offerings. At a time when email threats like spam and malware were rapidly rising, Postini‘s filtering gave companies "digital peace of mind".
Meanwhile, archival and web security services anticipated future demand in the maturing online landscape. Postini was perfectly positioned for acquisition by 2007.
Google‘s $625 Million Acquisition
In July 2007, Postini was acquired by Google for $625 million in an all-cash deal. This provided Google a major foothold in web security and email services to complement products like Gmail.
Over the next 8 years, Postini was slowly transitioned over and integrated into Google‘s offerings:
Key Transition Timeline
- 2007 – Founded as Google Postini Services post-acquisition
- 2012 – Google announces retirement of Postini as standalone services
- 2015 – Last Postini users migrated over 3 years after announcement
Shutting Down Postini
The lengthy transition process was punctuated by some controversies surrounding Postini‘s services under Google.
In February 2014, Postini‘s spam filter suffered an almost 2 week malfunction that caused severe email backlogs. And the 3 year migration timeframe from Postini to Google services frustrated many users.
By the mandated shutdown date at the end of 2015, Postini was totally folded into Google Apps and Gmail. The Postini name faded into history after 16 successful years.
Analysis: Smart Acquisition Play By Google
From a business strategy standpoint, Google‘s Postini acquisition and eventual assimilation made strategic sense:
Acquisition Pros
- Complementary email and web security services to its products
- Key customer and revenue base to integrate (~$100M/yr pre-acquisition)
- Talent and infrastructure absorbed rather than rebuilt
- Neutralized growing competition in security space
Transition Cons
- Lengthy (8 years) and complex technical transition
- Some loss of talent, customer dissatisfaction in process
- Short-term damage to Postini brand before shutdown
Overall, while the transition had some hiccups, acquiring and assimilating Postini gave Google strategic advantages in its security and email services. It eliminated a competitor and acquired proven technology and talent.
The temporary controversies surrounding Postini were outweighed by the long-term benefits to Google‘s product portfolio.
Postini‘s Legacy
Though the Postini name has faded into history, its DNA lives on in Gmail, Google Apps, and other Google offerings. Its pioneering work in email security and filtering fundamentally shaped web services as we know them today.
Postini‘s vision anticipated the future demand for email and internet security in the 2000s tech landscape. Though short-lived, Postini left an outsized impact on the industry after just 16 years in business.
