April 22, 2005
 



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Posted: 01.03.05
Coming Together
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Earlier this month, IT security software provider Symantec acquired storage and data protection software provider Veritas in a friendly $13.5 billion merger, creating, according to technology analyst group The 451, ďa new software powerhouse.Ē The combined company will remain under the Symantecís name with John Thompson staying as Chairman and CEO. Gary Bloom, president and CEO of Veritas, will be vice-chairman and president of the company.  

By Teresa von Fuchs




While M&A activity is often a sign of market consolidation, analysts seem to agree this is not the case here. Tim Bajarin, president of analysis and consulting firm Creative Strategies, explained, “This is less about consolidation and more about a strategic move for Symantec.” While security continues to play an important role in the future of IT, enterprise customers want simpler, multi-function solutions from fewer suppliers.

“Symantec realized that in the role of providing security to their customers, a key element is back-up,” says Bajarin, “The Veritas acquisition gives them the ability to provide a broader set of solutions to their customers, and it becomes a win-win for them, Veritas and their customers.”

Thompson commented during a press conference call, “When Gary [president of Veritas] and I first met, we immediately realized that we had a shared vision for the future for both of our companies.” He went on to explain that the merger places Symantec as the fourth largest software company worldwide and nearly doubles Symantec’s previous staff. Thompson says that the merged companies “will offer one of the broadest portfolios of software and solutions, on the most complete set of operating platforms, across all tiers of the infrastructure.”

That said, The 451, as well as other industry analysts, have pointed out the merger isn’t as simple as a match made in software heaven. The market has been wary of the merger, with Symantec stock dropping after the initial announcement and still only making small climbs back toward previous numbers. Tony Rizzo, mobile technology sector head at The 451 Group, says that, “Veritas is a huge company for Symantec to swallow.” And that initial concern over the merger makes market sense with the initial combination of two differing markets—not just the difference between security and storage, but also markets, while Veritas has a number of large enterprise customers, Symantec has mostly consumer play. Rizzo did concede, however, that though other concerns exist—including strategic ones as to how Thompson, who brought Symantec back in line with a singular focus on security, will manage the combined entity—many of these initial issues will work themselves out.







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