After acquiring successful on-demand security provider Postini, everyone’s favorite search engine turned SaaS leader, a.k.a. Google, quickly integrated Postini functionality into its Google Apps Premier Edition offering (read the press release here), which is quickly shaping up to be a major force in the on-demand office suite space. I thought it would be interesting to have a chat with Google about the integration and the future of Google Apps, and I was joined by Google’s Rajen Sheth, one of the product managers who work on Google Apps Premier Edition.

Can you talk a little about the rationale behind the integration of Postini functionality into Google Apps and what benefits customers will see as a result?

Sheth: The rationale behind the integration and the acquisition of Postini is twofold. One is that as we have been selling to businesses, we were realizing that compliance and email security are very, very important components to the story of providing a complete messaging solution to businesses — a clear component we needed to have within our offering to offer to medium-sized businesses or larger.

The other thing about Postini is that they’re one of the most successful SaaS vendors for messaging. So we thought that this would be a really great fit; what we did was basically within three weeks after announcing the acquisition, we integrated those technologies together. The core Postini functions were a specific policy-based virus filtering, content policy management product which basically allows the organization to choose what info they want to let through by email and control of outbound email based on keywords, and finally a 90-day message recovery package. That’s a 90-day rolling window of email for an organization, effectively a backup that they can recover from, which can be turned on as a service.

A part of the integration is also a promotional offer for Postini customers where we’re offering Google Apps Premier Edition to existing Postini customers for free until June of next year.

So what kinds of companies are typically using Google Apps Premier Edition and Postini right now?

Sheth: It varies across the board for both of those products, for Postini and Google Apps. We see customers of a variety of sizes from very small businesses to the largest of the large. We’re seeing interest in integration of these two specific functionalities across the board; many small customers activate and start using Postini functionality immediately after the integration. We’re also seeing a lot of interest from larger companies, so definitely an interest for our applications as a service.

Do you have any response to the market criticism from other office application suite leaders who claim that SaaS offerings aren’t ready for prime time?

Sheth: It goes down to the customers and we have over a half a million organizations that are using this, and most are businesses of a variety of sizes. We have educational institutions that are 10000 users apiece that are using this, and a few dozen enterprise pilots going on as well. We see a variety of feedback from the market that this is definitely a viable solution. The way that we do things is we really respond to user interest and to user needs, and our philosophy is to release something and continue to iterate, iterate, iterate. We’ve seen with Apps gaining more and more in the market at a high level.

What are the primary benefits companies are looking for with Google Apps?

Sheth: The main benefits that people are seeing the clear bens of SaaS in general. SaaS scales more effectively and us more cost effective as it scales, compared with the cost to deploy a solution in house SaaS is dramatically lower. As a service we can innovate very quickly and iterate as a service; one example is Prudential Realty in Chicago, which has several hundred real estate agents that they previously were not providing services too because agents were remote and not in one office.

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