Sophos acquires anti-spam specialist ActiveState

September 25, 2003 Sophos Press Release

Combined company poised for global leadership in enterprise anti-virus and anti-spam protection

Singapore - Sophos, a world leader in anti-virus protection for businesses, today announced that it has acquired ActiveState, a North American software company that develops anti-spam software for enterprises and professional tools for open source language programmers.

Driven by mounting pressures to ensure a secure and low-cost infrastructure, organisations are increasingly demanding consolidated protection against security threats such as viruses, spam and policy breaches. The transaction, worth $23 million in cash, thrusts UK-based Sophos into the leading position in meeting the expanding secure content management needs of businesses worldwide.

ActiveState is based in Vancouver, British Columbia, and serves more than two million customers, including HP, Intel and Microsoft. Sophos has purchased all the shares of ActiveState, and will retain all of ActiveState's 100-plus employees. ActiveState's headquarters in Vancouver will become an additional centre for research and development for Sophos and will also provide local market support in Canada as well as expanding Sophos's west coast support.

ActiveState's product lines for open source programmers will continue to be developed and sold under the ActiveState brand. As a division of Sophos, the existing ActiveState team is committed to continuing its support of the open source language community.

Industry analysts Gartner Inc. claim that up to 50% of the average business mailbox is spam. Although both the US and UK governments are proposing legislation against spammers, the problem is threatening to swamp businesses, preventing them from operating efficiently. Acquiring ActiveState leaves Sophos well positioned to meet enterprise demands for consolidated email protection. As Arabella Hallawell, research director, Gartner Inc., reports, "There is growing enterprise demand for combined anti-spam and anti-virus product and service capabilities at the email boundary."

Industry analysts Ferris Research agree. "Sophos and ActiveState have a shared vision, strong and complementary products, and a similar culture of engineering excellence," says David Ferris, president, Ferris Research. "Enterprises increasingly look to a single vendor for protection against spam and viruses at the gateway, so the acquisition of ActiveState by Sophos makes a lot of sense."

"The proliferation of spam, combined with our existing customers' increasing desire to receive anti-virus and anti-spam protection from the same source, means that now is a very strategic time for us to expand into spam filtering," said Peter Lammer, founder and joint CEO of Sophos. "With a focus on serving business environments, ActiveState has a very similar company culture to Sophos. There is also a good technical fit between both companies' proprietary technologies. ActiveState's proven technology, its impressive customer base, its expertise in the open source world, and in particular the quality of its staff are very valuable additions to Sophos."

ActiveState's President, Steve Munford, will be taking a key role in driving the anti-spam element of Sophos's business, becoming a member of the executive management team. Munford takes the post of Global VP Messaging, and will attend Sophos Plc board meetings.

"For the last three years, Sophos has significantly outperformed the anti-virus market as a whole. This impressive growth is a reflection of Sophos's unwavering focus on the enterprise market and its commitment to customer service," said Munford. "These qualities combined with our proven technology means that the company is well placed to meet the IT security needs of businesses. We are excited to be joining the Sophos team."

Sophos's anti-virus technology will be integrated with PureMessage, ActiveState's enterprise email protection software, to deliver industry-leading anti-virus and anti-spam protection in a single, consolidated solution - Sophos PureMessage. PureMessage currently supports AIX, HP-UX, FreeBSD, Linux and Solaris.

1 James Lundy, Maurene Caplan Grey, and Arabella Hallawell, "Stop Spam from Killing Workforce Productivity," September 22, 2003.

About ActiveState Corp

ActiveState, a division of Sophos, enables enterprises and IT professionals to increase productivity and organisational efficiency through the innovative use of open source technologies. Over two million developers rely on ActiveState's open source language programming tools, language distributions, and enterprise support services. www.activestate.com.