Deal Radar 2009: LiveOffice

LiveOfficeworks with large and small organizations to archive, discover (i.e., search for information in preparation for litigation), and manage their email. It operates under a Software-as-a-Service (SaaS) model and helps companies to handle an issue in capital expenditure, storage, backup, networks, replication, disaster recovery, upgrades, maintenance, monitoring, and management. Gartner, Inc. recently recognized LiveOffice as the largest provider of outsourced email archiving services in North America.

Businesses of all sizes generally outsource their email archiving to companies such as LiveOffice so that they can have easy access to old emails without the hassle of regular backups, storage limits, PST files, and regulatory compliance. Since email plays an important role in litigation, email archiving is obviously very important to a business.   

The company has recently introduced cloud-based email archiving support through its LiveOffice CloudMerge technology, offering a complete archiving platform for cloud and on-premise email solutions.  LiveOffice stands out as the first email archiving provider that makes it possible for its users to move email into the cloud regardless of their email platform. This reduces operating expenses for companies while allowing them to benefit from continuity and backup and recovery features. The company already supports several cloud-based solutions including AppRiver, Cisco WebEx Mail, Google Apps, and Apptix.   
 
LiveOffice was founded in 1998 by Alexander Rusich, who is now the chief visionary officer and chairman, and Matthew Smith, who is president and COO. LiveOffice is the second company that Rusich has led. Previously, he was CEO of Manhattan Analytics, a developer of fund analysis solutions for individual and institutional investors. Smith is a veteran in the message archiving industry with experience in designing and improving subscription-based business models. Prior to LiveOffice, he was co-founder of Manhattan Analytics, where he served as executive vice president of marketing. The CEO of LiveOffice, Nick Mehta, is responsible for growing the company and maintains its position in the SaaS messaging industry. He spent over five years at Symantec and Veritas Software, as vice president and general manager. Prior to Veritas, Mehta ran product management at XDegrees, a storage software startup acquired by Microsoft. In the mid 1990s, during college, Mehta cofounded his first business, a venture-funded online golf retailer called Chipshot.com, and was also entrepreneur-in-residence at Trinity Ventures. LiveOffice received an undisclosed invest from venture capital firm Summit Partners in June 2007.

The Torrance, California-based company has over 9,000 clients and a 97% client retention rate. Revenue has increased 222% from 2004-2007. The company was recently recognized by Inc. as one of the fastest growing companies in the United States and was added to the 2009 Inc. 5000 list. For the second consecutive year, it has also been selected as Deloitte Technology Fast 500, a list of some of the fastest growing companies in the country. 

Last year, the analyst firm Radicati Group predicted that the email archiving market will grow to $6.6 billion by 2012. According to a Gartner report, ‘Dataquest Insight: Email Archiving Software Market Worldwide, 2009’, the email archiving market grew 25.7% in 2008. The estimated number of people who use hosted services for archiving also grew, by 59% in 2008, to reach over 23,000 organizations, while in comparison, the number of on-premise archiving customers grew only 26% to about 29,000.

Pricing for LiveOffice’s different products varies. For example, the LiveOffice Mail Archive, which takes email from Exchange servers and sends it to the company’s data servers, starts pricing at $8 per user per month and varies depending on the number of users. LiveOffice has a Partner Program that allows partners immediate access to its suite of archiving solutions, as well as the sales, marketing, and technical support that they would need. 

Numerous companies compete in this space. Microsoft’s Hosted Archive is one such option. FuseMail and GFI Mail Archiver, which have approximately the same number of customers as LiveOffice, are just a few of the others with similar offerings, though GFI offers a software solution instead. There have been several recent acquisitions in the industry. A couple of months ago I wrote about McAfee’s acquisition of MX Logic, a leading provider of cloud-based Web and email security and email archiving for $140 million. In February, Dell bought over MessageOne, another SaaS email archiving company for $155 million. Fortiva, a provider of a combination of an on-premise and cloud-based storage and management was recently bought by Proofpoint. EMC’s purchase of Mozy improved its backup technology portfolio for SMBs, while the 2005 Veritas acquisition has strengthened Symantec’s position.  

Recommended Readings:
Storage Market Shrinks After 21 Years
Deal Radar 2009: AppSense
Deal Radar 2009: Clearwell Systems

This segment is a part in the series : Deal Radar 2009