Educom TS Inc., an Ottawa-based maker of e-mail archiving software, has been acquired by California's Zantaz Inc.

Financial terms of the deal were not disclosed.

In a mid-day conference call, Zantaz CEO Steve King said his company will hire on all 47 of Educom's employees and maintain the Ottawa office. Educom's staff will push Zantaz's total headcount to almost 210.

Educom's e-mail archiving services are delivered through software that is installed on site for the customer. Zantaz's similar service is provided with a hosted application.

"The addition of Educom significantly extends our ability to meet the full range of needs of our customers," King said.

The deal comes a month after Zantaz announced a $20-million VC round to finance its acquisition strategy (all figures in U.S. dollars).

Zantaz claims to hold about a 70-per-cent share of the market for outsourced e-mail archiving services, a market niche that has become all the more important over the past couple of years with the new emphasis on transparent corporate governance.

King said Educom brings Zantaz a network of about 70 distributors and resellers worldwide that will help the California firm break into foreign markets.

"Educom and Zantaz share the same vision, focus and commitment, and together we will provide the broadest range of world-class solutions that help customers effectively meet today's e-communications management requirements," said Educom president Andrew Moffat.

For fiscal 2002, Zantaz reported revenues of about US$4 million. Figures for 2003 are not yet available.

Palo Alto Calif.-based market research firm Radicati Group Inc. has forecast that the outsourced e-mail archiving market should average growth of about 85 per cent over the next four years, with total industry revenues growing from about $38 million in 2003 to $449 million by 2007.