In-Depth

About the Big Merger: VERITAS Responds

Is there anything left but spin in the storage management solution department?

• By Jon William Toigo
• 03/10/2005

In response to our February 17 column on the VERITAS-Symantec merger, e-mails poured in: from competitors who complained that they were not included in our survey, from end users who complained about the merger, and from PR folk for VERITAS who complained that they hadn’t been given equal time to respond to their critics.

Of these, Michael Hakkert, for VERITAS PR, knows how to push my guilt buttons. His question was a good one: what else could one expect competitors of VERITAS to say when asked about the merger but that it would be bad for technology, bad for customers, and bad for America? Why, he asked, did I not even pass the story by VERITAS for review and quotes to make a more balanced presentation?

I suppose that if this were a straight news story, and not a column, such a procedure would have been de rigueur. However, one could assume that for every negative statement about the merger from competitors, VERITAS would have simply issued a statement with a more positive spin. Still, Hakkert’s a nice guy, and I wasn’t sure if there was anything that VERITAS had to say that hadn’t already been reported in the press, so I agreed to the interview.

Hakkert hooked me up with Jeremy Burton, Executive VP over VERITAS’ Data Management Product Group, who spent the first half of our 30-minute chat going over what had already been announced. The merger was going to combine the product lines of two industry leaders (blah, blah, blah) making a more robust enterprise class solution (blah, blah, blah) combining security products from Symantec with VERITAS’ industry–leading, data–path, management-qua-utility computing software stack (blah, blah, blah). It was basically the same spin I had already read in 20 different publications. The only guy who gets to keep his job for sure is Gary Bloom, who will become vice chairman at Symantec and president of the new subsidiary company. Second-tier personnel decisions have not yet been announced.

Burton said that the specter of Fear, Uncertainty, and Doubt (FUD) about the product’s future were the result largely of the unique nature of the merger. “Wall Street has never seen a merger like this: two market-leading companies, two segment or category leaders. The Street sees this as risky because they have never seen anything like it before.”

He went to great pains on this point, differentiating the Symantec-VERITAS merger from the Oracle-PeopleSoft merger, which he suggested was largely a bid by one company to take over the other’s installed base. It was inevitable, in his view, that VERITAS competitors would try to spin the story in such a way that fanned the flames of FUD.

In response to the enterprise-versus-consumer sales focus of the two companies, he noted that VERITAS had for some years sold Backup Exec for the Windows world, a product it had acquired a couple of years ago from Seagate Software, which had acquired it from Arcada Software a few years before that. Sounds like a racing form pedigree for a horse, doesn’t it?

Backup Exec was proof that VERITAS cared about the small-to-medium-sized enterprise (SME), the traditional stomping ground of Symantec. This tidbit was offered to show synergies between the companies. He quickly added that Symantec had its own “enterprise tier” products, a fact confirmed by hallway encounters between reps of the two companies on visits to the same acquisition folks at large enterprise companies.

“I wouldn’t call us competitors,” he clarified, “We focus on protecting infrastructure from being broken. T hey have focused on protecting infrastructure from being broken into.” Nice sound bite, that.

As for competitor claims that VERITAS guys were showing up at their doorsteps looking for jobs and dissing their old employer, Burton dismissed the whole issue as Q1 foo. The first fiscal quarter, he reported, is a notorious time in the software market. Sales guys either meet or fail to meet their quotas and jump around the industry. He said his company had probably had as many interviews this quarter with sales reps from other companies as those companies had experienced with ex-VERITAS folk: it’s the nature of the beast.

He noted that hardware guys can’t do storage software as well as hardware-agnostic independent software vendors (ISVs). “Software companies do a good job with software, hardware companies don’t,” he stated as a dictum. Then, he made two caveats.

One had to do with IBM, which not only resells VERITAS wares, but, in his opinion, has some good wares of their own. It goes back to ex-CEO Gerstner’s mandate at IBM to do whatever was needed to solve the customer’s problem. (Burton sounded so pro-IBM at one point, my sneaky mind mulled over the notion that he might be jockeying for a position there should he find himself “mergered” out of a job—but that’s just me.)

The other interesting caveat to his dictum had to do with Oracle’s recent decision to build backup right into its wares: an obvious potential hit on VERITAS revenues from backing up Oracle DBs. Burton said, “The problem with Oracle is that it doesn’t understand the problem. People don’t want a bunch of proprietary backup applications built into each application they use. It is unmanageable.” He should know, having a racetrack bio that once saw him in Oracle’s stables.

I welcome reader feedback. You can reach me at jtoigo@intnet.net.