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When news of the Symantec-Veritas merger broke last December, Wall Street frowned. Over the next few months, shares took a beating, losing nearly half their value. Since April, Symantec has recovered some of that lost ground, and predictions are gradually becoming a little brighter.
"Wall Street was confused by the merger, as to their mind, there have not been too many big technology mergers that have worked," says Jon Oltsik, information security analyst at the Enterprise Strategy Group. "The stock is now edging up, as it makes logical sense to the customer base of both companies."
Symantec president and vice chairman Gary Bloom concurs. He reports that the installed bases of both companies are responding positively to the merger, as evidenced in customer advisory boards and executive interactions with clientele.
IDC storage software analyst Rhoda Phillips views the acquisition as a positive for the large Veritas user community.
"Veritas customers will now have easier access to security software, hardware and services than in the past," says Phillips. "Veritas products, which have generally been pitched to enterprise customers, will also become more available to small and medium-sized businesses through Symantec's customer base."
As Symantec sees it, the addition of Veritas brings together the leader in security software with the leader in storage software. These two areas, says Bloom, form a vital combination in meeting the challenges of securing and managing an irreplaceable business asset information.
"This transaction is unique because we are combining two industry leaders," says Bloom. "The new Symantec brings together more than 14,000 of the industry's best and brightest, focused on the two top issues on the minds of CIOs worldwide security and the availability of information."
While some mega-technology mergers, such as HP-Compaq, appear to have been a disappointment, not all mergers are created equally. Some companies, for example, have turned the art of business acquisitions into a smoothly oiled process. They have entire teams in place and vast tomes of best practices they call on to ensure rapid assimilation.
Cisco, for example, gobbles up companies as easily as melting M&Ms in your mouth. And it's the same for Symantec. The security giant has been at the acquisition game for about two decades, growing from obscurity to global dominance in the enterprise marketplace. Remember Norton Utilities? Symantec consumed that firm a long time back and has since added dozens more to the fold most recently, firms such as On Technology (patch management) and PowerQuest (partitioning and systems management) as part of a long-term enterprise strategy.
"The acquisition of Veritas was consistent with Symantec's previously stated goal of integrating security with system management," says Phillips. "It also augments Symantec's previous system management acquisitions of On Technology and PowerQuest."
Accordingly, Symantec has wasted no time in handing Veritas the yellow jersey. According to Bloom, a joint team from both organizations has been working intensely since December to enable as smooth a transition as possible. Built in to the process is a focus on making the merger as seamless and quickly beneficial to customers as possible.
"While there is much work to do now that the transaction is complete, we believe everything is going smoothly in terms of bringing the organizations together quickly and effectively," says Bloom.
Storage Security Boon
Panned in the beginning, the merger appears almost prescient in hindsight. Storage security was largely off the radar back in December when the merger was announced, but since then, high-profile incidents of misplaced customer data tapes and other data security breaches have brought security to the forefront of IT issues. Analysts were even heard commenting that Veritas needed a more comprehensive answer for security.
"Veritas had no clear stance with regard to security," says Mike Karp, an analyst with Enterprise Management Associates.
That will soon change.
Next week, Symantec will unveil the first products from the merger, and a lot more will follow that. Bloom lays out a long range plan as follows:
In the first six months after the merger, which closed July 2, product integration will be focused on product compatibility testing, delivering product combinations to support solutions such as Business Continuity, Regulatory Compliance and E-mail Solutions, and leveraging the DeepSight early warning product set to trigger alerts in back-up products.
Within a year, Symantec intends to begin product-to-product integration, including licensing, and the company plans to integrate LiveUpdate technology into all products, providing a method to deliver product and security updates directly to the desktop, gateway or server.
Longer term, Symantec intends to develop new functionality based on combined features and integration of a common platform.
"The first thing we should be seeing is a product suite for e-mail," says Oltsik. "Initially, this will just be sales bundling, but the product will evolve into an integrated e-mail backup, security and archiving suite."
But will the Veritas moniker soon become a thing of the past? Will we soon be buying "Symantec NetBackup?" The short answer is yes. Symantec intends to re-brand the Veritas product line to reflect the fact that the products are now offered by Symantec. Product names, however, will stay the same immediately following the merger. Bloom says the products will continue on their respective product plan until there is a major product revision or integration that warrants an update to the branding or product; in other words, the existing development path for products like NetBackup will continue.
"Both companies' products will continue their normal lifecycles," says Bloom.
Oltisk believes the merger is part of long-range maneuvering by Symantec to establish a firm footing for future growth.
"Symantec was getting caught between Cisco on the networking side and Microsoft on the systems side," says Oltsik. "Veritas is a leader in its field, and Symantec desired the enterprise strength of its account base in a market that was really open."
He sees the deal as a portent of things to come in storage. Faced with increasing risks from all fronts, more and more companies are appointing C-level executives called corporate risk officers. Their responsibilities encompass disaster recovery, data protection and information security the same areas that Symantec and Veritas cover.
"We'll be seeing a lot more storage leaders getting the security religion," says Oltsik. "We'll also see a lot of big security vendors paying attention to data security and partnering with storage firms."
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