Proofpoint Adds Email Security Layer With Cloudmark Buy



Dan Gunderman
11/07/2017

Today, cyber threats are a round-the-clock nuisance – and can only be fought off with the most sophisticated defense strategies. That’s why consolidation is becoming a trademark of the security arena.

That trend has continued this week with Proofpoint, Inc.’s acquisition of fellow software company, Cloudmark. The deal is worth a reported $110 million. It is set to be finalized in Q4 of 2017, but is pending regulatory approval.

Proofpoint is an enterprise security company based out of Sunnyvale, Calif., that provides software as a service (SaaS) and products for email security, data loss prevention, email encryption and other options. Similarly, Cloudmark is a threat protection software company whose products safeguard 12% of the world’s inboxes and 20% of mobile accounts. Its main focus, then, is in internet service providers (ISP) and mobile carrier markets.

The move will bolster Proofpoint’s email defense capabilities, and will likely add $20 to $25 million to its full-year revenue range – to the area of $664 million and $673 million, according to TechCrunch.

Proofpoint’s Chief Executive Officer, Gary Steele, said in a statement, “We are excited to welcome Cloudmark’s ISP and mobile carrier customers to Proofpoint. By combining the threat intelligence from Cloudmark with the Proofpoint Nexus platform, we can better protect all of our customers – both enterprises and ISPs – from today’s rapidly evolving threats.”

Takeaways of the transaction appear to be twofold: both in product and customer expansion and in a widening of the company’s data resources. This comes in a year when threats are not static, predictable operations, but instead adaptive, intelligent and ensconced efforts – that will likely tap on enterprise doors as long as they are closed. Proofpoint’s rationale, then, appears to be in adding a few more padlocks on that proverbial door.

See related: Synopsys Buys Black Duck, Eyes Open Source Security

Cloudmark’s technology analyzes billions of emails and messages every day, in a reactive, pattern-detection way of combating threats. This service will be absorbed into Proofpoint’s Nexus layout.

Cloudmark’s Chief Executive Officer, Jason Donahue, said in a statement, “Messaging has been the number one threat vector for years, but with ransomware and BEC (business email compromise), it’s never been a more urgent issue. We’re thrilled to be continuing our work to fight advanced threats in messaging as part of Proofpoint.”

Cloudmark’s history is a long one in the tech space. Founded in 2001, it raised $39 million in investor funds – from the likes of Nokia Growth Partners, Ignition Partners, FTVentures and Summit Partners.

Initially, its services scanned emails and blocked spam. But like any “malleable” security company, it advanced as threats deepened. This meant a new focus became similar blocking methods for SMS messages. With the meteoric growth of messaging applications, the technology has landed on hacker hit lists.

That’s where messaging security comes into play. And it’s where Proofpoint will likely grow in the immediate future, as an estimated $5.5 billion is projected to be spent on messaging security products by 2022, according to Markets and Markets.