Email Security Market Continues Hot: Proofpoint Revenues Reach Record Levels Once Again, Sophos Sells Majority Stake to Apax Partners

A couple of notes on the continued strength of the email security market and (as the mainstream press would say) "cybersecurity" market in general:

Today, Proofpoint announced that Q1 2010 was its 27th consecutive quarter of record revenue (see our press release, "Sass Email Security and Compliance Leader Proofpoint Reports Q1 2010 Results, Achieves 27th Consecutive Quarter of Record Revenue"). Drivers for Proofpoint's strong business in Q1 included accelerating griwth in SaaS email archiving, increasing government sector traction, increasing demand for email encryption and continued strong customer renewals and upsell.

Proofpoint CEO Gary Steele says in the release that, "Proofpoint is off to an extremely strong start in 2010. Large enterprises and government organizations worldwide continue to look for ways to improve email security while reducing costs. At the same time, the global trend toward stricter, more complex data privacy regulations are driving interest in our data loss prevention, email encryption, compliance and eDiscovery solutions. As a result, we’re seeing accelerated growth in our email archiving business and increased uptake of our DLP and email encryption solutions with both new and existing customers."

To learn more about the market drivers for email security and Proofpoint's performance relative to the market as a whole, check out Gartner's 2010 Magic Quadrant for Secure E-Mail Gateways, which you can read compliments of Proofpoint.

In related news, IT security and data protection vendorSophos announced that it will sell a majority interest in the company to a private equity firm, Apax Partners. Sophos's press release on this is here: "Apax Partners to Acquire Majority Interest in Sophos Plc." The deal is worth $830 million with Apax taking a majority stake while Sophos founders are said to retain a "significant minority shareholding."

Byron Acohido at USA Today has a good summary of this news in the story, "Investors buy majority stake in Sophos for $840 million." As he writes in that article:

The deal underscores the strength of the IT security industry. It also takes UK-based Sophos -- the world's third largest antivirus supplier, behind Symantec and McAfee -- out of the running of private tech security firms in strong position to go public this year.

In that paragraph, Acohido links to a previous article, "Cybersecurity stocks look hot in 2010," wherein various analysts are quoted as saying that the recent row between Google and China has put a spotlight on IT security and that both publicly and privately held security companies stand to benefit. In comments attributed to Asheem Chandna, partner at Greylock Partners, that earlier article noted that:

Private firms with strong balance sheets and good growth prospects that might be viewed as viable candidates to float an initial public stock offering include Sophos, Barracuda Networks, Qualys, Proofpoint and Tripwire, Chandna says. He estimates 30 to 50 tech firms could go public this year, including three to five tech-security companies.