Veritas to Buy KVS -

Veritas to Buy KVS

In a year when many of the leading e-mail archiving businesses are being snapped up by larger companies, storage and utility computing specialist Veritas Software agreed to acquire KVault Software Limited for $225 million in cash.

KVS makes Enterprise Vault, software that lets its 1.7 million users store, manage, back-up and archive corporate e-mail and data held within Microsoft Exchange, Microsoft SharePoint, Microsoft Office and file systems.

These tasks are crucial at a time when the number of e-mail files is exploding and government regulators have established stringent compliance laws for retaining records. Archiving infrequently accessed information enables organizations to more easily manage storage growth while reducing associated hardware and management costs.

Moreover, KVS software quickly retrieves files, an integral task in the case of a regulatory inquiry.

By purchasing KVS, Veritas is making a strong play against competitor EMC in providing information or data lifecycle management, processes for managing files from cradle to grave according to importance and frequency of use.

KVS was the largest e-mail archiving software company remaining on the market after Veritas rival EMC acquired Legato Systems last October. KVS, which has offices in the United Kingdom, United States and Europe, recorded $23 million in revenues in 2003.

While Veritas' Data Lifecycle Manager is meeting certain needs, company officials realized that e-mail archiving is growing so much -- a 57 percent compound annual growth rate through 2007, according to Gartner Group -- that it became necessary to acquire a market leader like KVS to vault over competitors and pull closer to EMC.

Gary Bloom, chairman, president and CEO of Veritas, said on a conference call the purchase is ideal for because KVS' e-mail archiving software offers a bridge between back-up and storage management.

More broadly, Mark Bregman, executive vice president of product operations at Veritas, said the purchase dovetails with Veritas' company-wide utility computing strategy.

"Managing large volumes of data, which e-mail contributes significantly to, in an automated way across distributed infrastructure, and being able to manage the migration of e-mail across different classes of storage, is a critical part of turning storage into a utility," Bregman said in the call.

Bregman said Veritas will migrate customers from its Data Lifecycle Manager product to KVS' Enterprise Vault and in turn integrate this product with Veritas data protection and management products over time.

This means KVS' e-mail archiving software customers will benefit from Veritas' proven management, back-up and recovery software in an integrated product.

The purchase is scheduled to close in September, with KVS CEO Mike Hedger and his team of approximately 200 employees operating as a separate unit for Veritas.

Despite Veritas' new purchase, EMC has quite a head start in terms of bundling Legato products into its portfolio. But the two companies are not the only vendors making archiving plays to bolster their wares.

Open Text this year acquired Ixos Software for $250 million and Zantaz recently moved to purchase Steelpoint Technologies for an undisclosed sum.

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