Veritas to Buy KVS

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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

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

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

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.

Clint Boulton
Clint Boulton
Clint Boulton is an Enterprise Storage Forum contributor and a senior writer for covering IT leadership, the CIO role, and digital transformation.

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