Proofpoint, Inc. Acquires SaaS Email Archiving Vendor Fortiva, Inc.

Proofpoint Extends Leadership in Email Security and Management by Adding On-demand Email Archiving to its Suite of Email and Data Security Solutions

JUNE 24, 2008 – Sunnyvale, Calif. - Proofpoint, Inc., the leading provider of unified email security and data loss prevention solutions, today announced that it has acquired Fortiva, Inc., a leading provider of on-demand email archiving solutions for legal discovery, regulatory compliance and email storage management. The acquisition strengthens Proofpoint's position as a leading vendor of SaaS (Software-as-a-Service) and hybrid solutions for email security, data loss prevention and email archiving.

Fortiva provides an on-demand email archiving solution that addresses three key challenges - email storage management, legal discovery and regulatory compliance - without the headaches of managing an archive in-house. As a Software as a Service (SaaS) solution, the Fortiva Archiving Suite™ can be up and running in days, with minimal upfront capital costs and planning requirements. The Fortiva solution uses an innovative hybrid deployment model that delivers the cost advantages of SaaS with the guaranteed security of on premises appliance.

Fortiva's archiving solution becomes the latest addition to Proofpoint's growing family of SaaS and hybrid solutions. Proofpoint's flagship SaaS solution, Proofpoint on Demand™, delivers Proofpoint's industry-leading messaging security features-including anti-spam, anti-virus, email policy enforcement, data loss prevention and policy-based encryption capabilities-as a cost-effective, easy-to-adopt and easy-to-manage on-demand service.

"Our customers look to Proofpoint to help them manage, protect and enable their corporate email. Secure, easy-to-use email archiving is one of the most frequently-requested features from our global customer base," said Gary Steele, CEO of Proofpoint, Inc. "Fortiva's email archiving solution is the most advanced, secure, easy-to-deploy and cost-effective solution in the market today and we're excited to have Fortiva's team and technology as part of Proofpoint. Fortiva's on-demand solution is a natural extension to Proofpoint's email security platform, so nearly all of our customers can deploy and benefit from Fortiva immediately."

All Fortiva products and services continue to be available with no disruptions in service for current Fortiva customers and channel partners. Development and support for the Fortiva Archiving Suite will continue to be based out of Fortiva's Canadian headquarters in Toronto, Ontario. The solution is primarily sold through channel partners, including Microsoft Online Services and MessageLabs.

"Joining forces with a leading enterprise email vendor like Proofpoint is a win-win situation for Fortiva and our customers," said Chris Tebo, CTO of Fortiva. "Our shared focus on customer satisfaction, leading-edge technology and innovative deployment models makes this a perfect fit. Becoming part of the Proofpoint team greatly extends Fortiva's global reach and visibility in the market."

Industry analysts have acknowledged email archiving as a "must have" component of today's enterprise email infrastructures, noting that enterprise needs for record retention, electronic discovery and improving mailbox management have resulted in rapid growth for the email archiving market.

"Our research shows that the vast majority of enterprise IT organizations have been required to search through backups to retrieve one or more email messages in the past 3 years. Companies of all sizes should be archiving email, so they are prepared to meet the legal discovery, supervisory and retention requirements that impact them," said Michael Osterman, president of Osterman Research. "On demand email archiving services are ideal for organizations that want to quickly deploy a solution without large upfront investments of capital or internal IT resources."

As just one example of the forces driving rapid growth in the email archiving market, email is an increasingly common target in legal discovery. Recent research by Proofpoint (http://www.proofpoint.com/outbound) revealed that nearly a quarter of large U.S. enterprises were ordered by a court or regulatory body to produce employee email in the past 12 months. Changes to the Federal Rules of Civil Procedure (FRCP) mandate that these electronic communications need to be produced in a timely manner and place a burden on businesses to retain all of their electronically-stored information (ESI)-including email-for litigation and regulatory purposes.

While data loss prevention features-such as the content monitoring, filtering and encryption features provided by Proofpoint's appliance, virtual appliance and on-demand services-can help enforce email policies and mitigate many of the legal, financial and regulatory risks associated with outbound email, the high-performance, on-demand archiving solution provided by Fortiva delivers additional benefits, including:

• Instant legal discovery: Companies can retrieve all relevant messages in seconds from a secure archive.
• Worry-free email retention: Retention policies are easy to configure and automatically enforced.
• Simplified email storage management: End users benefit from a virtually unlimited email inbox with instant access to archived messages—right within Microsoft Outlook. At the same time, Exchange performance is greatly enhanced by reducing the size of Exchange’s message store.
• Guaranteed data security: Unique DoubleBlind Encryption™ guarantees the security of each customer’s data, ensuring that no one outside the organization can access archived data. Messages are encrypted before being sent outside the customer firewall over a secure connection and are stored in encrypted form in the archive.

Proofpoint Email Archiving™-the Proofpoint-branded version of Fortiva's archiving solution-is available immediately through Proofpoint and its global network of channel partners. The solution is ideal for any company running Microsoft Exchange 2000, 2003 or 2007 with Active Directory Server. To learn more, or to request a free demonstration, please visit: http://www.proofpoint.com/archiving

About Fortiva, Inc.
Fortiva is a leading provider of on-demand email archiving solutions for Microsoft Exchange, providing storage reduction, legal discovery and regulatory compliance. With a global data center presence, Fortiva delivers its enterprise-grade solutions through a strong network of strategic partnerships, including Microsoft Online Services, MessageLabs, Bell Canada, and Mercury Technologies. Fortiva is a privately-owned company, with investment from Cargill Ventures, Ventures West and McLean Watson Capital. For more information, visit http://www.fortiva.com.

About Proofpoint, Inc.
Proofpoint provides unified email security, data loss prevention and email archiving solutions that help enterprises, universities, government organizations and ISPs defend against spam and viruses, prevent leaks of confidential and private information, encrypt sensitive emails and comply with regulations that affect email use. Proofpoint's products are controlled by a single management and policy console and are powered by Proofpoint MLX™ technology, an advanced machine learning system developed by Proofpoint scientists and engineers. Proofpoint solutions can be deployed in hosted service, hardware appliance, virtual appliance, software and hybrid models, for maximum flexibility and scalability. For more information, please visit http://www.proofpoint.com.

Lightning strikes twice

Barry Critchley, National Post
Published: 6/26/2008 12:00:00 AM

Unlike a souffle, which doesn't rise twice, one entrepreneurial group has received backing from venture-capital firm McLean Watson for a second time. One proviso: The decision is easier if the group was successful with its first venture.

"We gave Paul Chen his first million dollars when he started FloNetworks and we gave him his first million dollars when he started Fortiva in 2004," said John Eckert, a managing partner at McLean Watson. FloNetworks was sold to Double Click in 2001 for US$80-million while Toronto-based Fortiva was sold to Silicon Valleybased ProofPoint this week. While the terms were not disclosed, Eckert said that those involved in the recent sale are happy with the return.

More important, Eckert said the sale shows there are serial entrepreneurs in Canada. "It's tough enough to get lightning to strike once, let alone twice," said Eckert, a director of both FloNetworks and Fortiva. "Success begets success. When you are associated with a winner, you get the confidence to go out and do it again."

And there is logic behind backing the same group. "The biggest risk in venture-capital investing is the management risk. Once the money goes in, it comes down to management. If you can work with managers that you know are good and who are known quantities, it removes a huge risk factor," said Eckert, adding that that factor often explains why U. S. venture-capital firms are more successful than their counterparts in Canada. "The Silicon Valley VC firms are able to work with a stable of seasoned veterans, people who have done it before. In Canada, we are still trying to get to that critical mass."

There is another advantage of backing people: It keeps the focus on management and not on the technology. "If you back the right person, by extension that person will figure it all out, will find the right market and the right product."

Adds Chen, who trained in electrical engineering: "There is a gut feel about all this stuff, but the gut feel comes down to the people. The entrepreneur has to be flexible, to be willing to change strategy, but most importantly to have passion, to be willing to stick with the business."

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McLean Watson and Chen have enjoyed a decade-long relationship. It started in 1996 when the firm backed FloNetworks, a direct e-mail relationship management firm started by Chen. Eric Goodwin, the former chief executive of Fulcrum Technologies and a person Chen met in 1995, be-came chief executive.

After FloNetworks, which raised about $30-million in total, was sold in a cash-and-stock deal in April, 2001, Goodwin retired, while Chen became the entrepreneur in residence at Mc-Lean Watson. While in residence, Chen looked around for his next venture. In September, 2004, he formed Fortiva, a company in the e-mail management business.

Chen then reassembled as many of the former FloNetworks staff as he could. One of his first calls was to Ottawa-based Goodwin, who was installed as chief executive. Other former FloNetwork staffers who signed on include Wilson Lee, chief financial officer; Craig Rennick, vice-president of sales; Chris Tebo, chief technology officer, and Praising Gaw, vice-president of marketing. Apart from the people, McLean Watson and Fortiva also called on former backers. Ventures West, which had also backed FloNetworks, also invested in Fortiva.

As for Eric Goodwin, he intends to enjoy the good life -- though apparently nothing is permanent.

bcritchley@nationalpost.com

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