Although the Software-as-a-Service (SaaS) business applications and cloud computing development environments are getting the lion’s share of the attention in the press today, the most prevalent form of on-demand services continues to be hosted email and security services.

Email and security management are escalating challenges for IT and business decision-makers facing greater demands for real-time communications from their end-users, coupled with growing concerns about viruses, hackers, compliance and litigation.

As a result, an increasing proportion of companies and non-profit institutions are choosing to ‘out-task’ their email and security management to third-party hosting companies and managed service providers (MSPs).

However, enterprises and on-demand service providers alike are also recognizing that email, security, storage, archival, e-discovery, business continuity and disaster recovery are all intertwined. Therefore, IT/business decision-makers are seeking providers who can service as a strategic source for these services and providers are seeking to build service portfolios which can satisfy these requirements.

It is for these reasons that Symantec announced its acquisition of MessageLabs yesterday. Symantec has made it clear that it recognizes the growing demand for SaaS alternatives to traditional software products and is committed to providing on-demand solutions which respond to its customers’ rapidly changing needs. However, the company has also discovered that there are a myriad of internal and external challenges fulfilling this promise.

The acquisition of MessageLabs gives Symantec a proven set of on-demand services and experienced business executives who can help the software vendor overcome the obstacles which have prevented it from rolling out its offerings more quickly.

MessageLabs’ hosted email and security services can complement Symantec’s storage services. In addition, MessageLabs has a solid installed base of customers and strong channel partners, an aspect of the on-demand services puzzle which Symantec has been trying to assemble. Symantec has its own vast base of customers and channels to market for its traditional products and services, along with the service delivery infrastructure and provisioning engine it has built for the Symantec Protection Network (SPN).

Because of MessageLabs’ track record of success, the company’s leadership team will assume responsibility for Symantec’s entire on-demand services portfolio and go-to-market strategy. The infusion of this new leadership, along with their indepth understanding of the business requirements for delivering scalable on-demand services, should enable Symantec to accelerate its efforts to become a major player in the SaaS marketplace.

This isn’t the first acquisition of this nature. Google bought Postini and Dell acquired MessageOne in response to the same market trends. Now, Symantec is in a better position to respond to its customers’ needs and keep pace with the competition for these services.