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Brightmail stands out from me-too crowd

Dec 08, 20034 mins
Enterprise ApplicationsMalwareMessaging Apps

As proof of the recent explosion in spam-fighting products, an analyst report issued last month highlights the $100 million in venture capital that has been poured into these companies over the last 12 months. Anti-spam software maker Brightmail, however, was not on this list.

That’s because as the Ferris Research report points out, Brightmail is making money, unlike many start-ups in this now-crowded market.

The privately held company, which says it turned a profit for the last three quarters and has $25 million in the bank, plans to ride its current momentum into a public offering in 2004, according to CEO and President Enrique Salem. Brightmail, which began selling spam filters to ISPs in 1998 and released an enterprise version of its software last year, has emerged as a top spam fighter. In a market flooded with me-too products from countless start-ups, having a time-tested product and impressive customer list are important distinctions. Brightmail’s filters scan 11% of the world’s e-mail that traverses the Internet, a figure that all the other vendors combined can’t match, Salem says.

Expanding into e-mail management

In addition to its focus on fighting spam, Brightmail intends to expand into the larger category of e-mail management. “We have the opportunity to be the dominant provider of e-mail solutions,” he says. For example “we’re all spending too much time in e-mail, we want to do intelligent management of e-mail.”

In the meantime, the company is competing in an anti-spam market that just about everyone wants a piece of. In addition to the 70 or so anti-spam vendors selling products, Brightmail also must compete with anti-virus giants such as Network Associates and Symantec (which owns 12% of Brightmail but is developing its own anti-spam technology) and e-mail security vendors such as Clearswift and Tumbleweed Communications that also offer spam filters. So while Brightmail cuts a high profile among anti-spam vendors today, there are no guarantees for the future as the market consolidates.

“Brightmail has a very nice base from which to work, a substantial revenue stream from ISPs, nice partnerships . . . their chances are as good as anyone’s,” says Matt Cain, an analyst with Meta Group. “If they make the right moves at the right time they have a reasonable chance of being one of the vendors standing.”

No one’s perfect

Another challenge facing Brightmail and other anti-spam companies is imperfect technology – today no company can guarantee to catch all spam entering an organization while ensuring all legitimate mail passes through. Since Brightmail was founded, it has focused on providing customers with a low false-positive rate, Salem says. But maintaining a low false-positive rate means Brightmail’s software might not block as much spam as others; a trade off the company is willing to live with. “If anyone says ‘I’ve got the final answer to spam,’ they haven’t understood the problem,” he says.

Dennis Bell, director of IS operations with chip maker Cypress Semiconductor of San Jose, agrees that maintaining a low false positive rate is essential to businesses, which can’t afford to miss crucial communication because a filter mislabeled a message as spam. However, Bell continues to push Brightmail to improve its software’s ability to catch spam.

“We encourage Brightmail to keep up the development work,” Bell says, adding he’s seen the software improve from catching 93% of all spam received to about 97 % over the past 18 months. “Brightmail may not be the best in terms of total [spam] block, but they are with false positives, and that’s important to us.”

Although the anti-spam market is a hot one, most experts predict that the onslaught of unwanted e-mail will wane as more filters are employed and the return rates that spammers see on their mailings dwindle. However, that doesn’t mean companies such as Brightmail will go away, Salem says. “We will get this [spam] problem under control over the next three years,” he says. “People say if we do that, our business is over, but if you take police off the streets, crime comes back. Spammers will always be there, and we’ll always be there, too.”

Location: San Francisco
CEO:Enrique Salem
Primary business: Anti-spam and anti- fraud products.
Financing:Privately held; $25 million in the bank; investors include Symantec, Accel Partners, Crosslink Capital and Technology Crossover Ventures.
Key customers:eBay, Booz Allen Hamilton and Deutsche Bank.