Google has dug deep into its pockets again and spent $625m – in cash – to buy a little known security firm Postini. The acquisition – the third major one this year by Google – is an important step forward in the delivery of online applications.

For some years now commentators have speculated that we won’t need to buy boxed software. Instead, they argued, all the programs we want could be hosted online in a server and we would just “rent” the software as and when we needed it. However, to achieve that two things were needed – fast access speeds to distant servers and security.

With boxed software you keep the program on your computers and what you create with that program is also only ever on your computers – unless you email the file or upload it to another machine. With online applications, your data is in constant communication with the program, leading to an obvious security risk. For this reason many businesses have shied away from using online software, instead opting for the security of boxed programs.

Now, with Google’s purchase this risk is being removed. Postini is a security firm which will be able to provide high levels of security for anyone using Google Apps, such as their spreadsheet or word processor. In buying Postini, Google has removed a barrier for the use of online applications. Now, with fast access speeds thanks to broadband and the new levels of security this deal will bring, using online applications becomes viable for many businesses – including large blue chip firms.

Google Apps are free of charge for most people – you can create a word processed document without ever needing a word processor, similarly you no longer need a spreadsheet. Several thousand people already use the Google online applications, but the security provided by the Postini deal – and the low cost of use – will mean many big businesses will start to consider switching away from boxed software that is costing them megabucks. And when that happens you can expect significant changes in the way business is conducted online.

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