CNN Money asks if a bubble is forming in the anti-spam space:
As unwanted e-mail continues to be a huge problem for corporations and consumers, analysts expect both more mergers in the sector and more companies looking to go public.
But is there enough spam fighting business to go around to justify a wave of IPOs? Some analysts that follow the sector don’t think so, which could mean that anti-spam is the next candidate for a tech bubble in the making.
Attracting a lot of IPO buzz these days are Postini and rivals on the managed services side of spam-blocking, FrontBridge Technologies and MessageLabs. Other companies in the anti-spam area with software and hardware solutions include MailFrontier, IronPort, and CipherTrust.
Petry said that Postini is not currently profitable but that it has had profitable quarters in the past. He would not disclose exact sales figures but said Postini was “not that far off from Brightmail.” Brightmail’s sales more than doubled last year, to $26 million.
Michael Osterman, president of Osterman Research, a research and consulting firm focusing on messaging, estimates that there already about 150 anti-spam vendors. He adds that more people, lured by the potential riches, will likely enter the market in the near future.
Anti-virus software firms like Symantec, Network Associates and Trend Micro are bulking up their anti-spam efforts. And network security is becoming a bigger area of focus for networking equipment companies such as Cisco Systems and Juniper Networks, which agreed to acquire firewall security firm NetScreen Technologies [in February].
Alan Weinfeld, a security software analyst with Fulcrum Global Partners, thinks that a bigger e-mail problem will be what is known as “phishing.” That’s when someone sends an e-mail that appears to be from a reputable source (i.e. a bank or e-commerce site) and asks for valuable information such as social security or credit card numbers.
Weinfeld said that there’s probably room for about only four or five major public anti-spam companies. He thinks Tumbleweed, Brightmail, Postini and CipherTrust have the best chances of remaining independent.