Snapshot: USA.NET’s Hosted Email Services

Here's an update on USA.NET, a hosted messaging firm.

USA.NET was purchased by Perimeter eSecurity in 3Q2007. Perimeter has a wide range of network-related services, which are described as falling into the following categories: vulnerability defense, intrusion defense, network defense, email defense, system defense, and user defense. Most customers are medium-size organizations. The USA.NET division represents about 30% of Perimeter's revenues. Here's an update on USA.NET.

Offering Summary

  • Hosted Exchange/SharePoint/OCC.
  • A less expensive Linux-based hosted email solution called Commercial Messaging Service.
  • Wireless support for a variety of devices, including Windows Mobile, BlackBerry, iPhone/ActiveSync, and Good.
  • Virus and spam control.
  • Instant messaging. Jabber-based for CMS, or Jabber or OCS for Exchange.
  • SharePoint teamspaces.
  • Archiving.
  • Business continuity: If your internal Exchange server goes down, users can continue doing email.
  • Unified messaging.

Customers

  • 80% of customers have fewer than 1,500 seats.
  • 20% of customers have more than 1,500 seats.
  • 10% to 20% of users get wireless.
  • Total of 1 million seats; of these about 250K seats are for hosted Exchange, the rest on CMS.

Typical Cost

  • $5 to $20/seat/month; depending on level of features, amount of storage.
  • Average is $6.50/seat/month.
  • Exchange is substantially more expensive than CMS.

Competition and Competitive Strengths as Perceived by USA.NET

  • Intermedia is the primary competitor. Intermedia is aimed at firms with 25 seats and less, and offers limited support and functionality. USA.NET focuses on mid-size and larger customers, and has more extensive features and support.
  • RackSpace/MailTrust is another, but USA.NET has better customer services and professional services.

Company and Finances

  • About $23M revenues annually in messaging; 75% in hosted Exchange, 25% in CMS.
  • Perimeter had about $4.5M of funding up to 4Q2007.
  • Perimeter had about $30M in revenue prior to the USA.NET acquisition.
  • Perimeter acquired USA.NET in 3Q2007 for an undisclosed sum. Goldman Sachs and Bessemer Venture Partners provided $104M of equity financing to buy out prior investors, and provide working capital and money for acquisitions.
  • Merged companies are profitable, with revenues exceeding $60M annually.
  • 325 employees.
  • Perimeter is making about one acquisition per quarter.
  • Messaging services will probably continue to be 30% to 40% of Perimeter's revenues for the foreseeable future.

... David Ferris

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