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ayJanuary/February 2005

Symantec buys Veritas to broaden enterprise appealBrian McKenna

Big Yellow announced a

merger with storage soft-

ware vendor Veritas just before

Christmas, in a move that broad-

ens its product range into the

enterprise market.

After the all-stock acquisition

closes in the second quarter of

2005, Symantec expects to have

annual revenue of $5bn. Only

Microsoft, Oracle and SAP make

more money from software.

Based on Symantec’s stock

price of $27.38 at market close

on 15 December, 2004, the

transaction was valued at ap-

proximately $13.5bn.

The deal marked the second

major merger of software firms

in the same week, following

Oracle’s $10.3bn takeover of

PeopleSoft.

Ajei Gopal, senior vice presi-

dent for technology and corpo-

rate development, Symantec

said that the merger was “an of-

fensive move. It’s not about cut-

ting costs, but about growth”.

Asked what kind of company

the new Symantec will be, he

said:“We will be an information

integrity company.

"Security is not a thing unto

itself.We’ve found that the cus-

tomer conversation was broad-

ening beyond that to IT infra-

structure.The confluence of in-

formation availability and secu-

rity is key.And so we made the

natural link to join up with

Veritas, as the information avail-

ability leader.

"The combined company will

offer the most comprehensive

solution in the market for secu-

rity and availability in heteroge-

neous environments — from

the desk top to the data centre,

and from consumers through

SMBs to large enterprises”.

Gopal said that the company

had started looking at the “con-

fluence of security and avail-

ability” around the end of 2003,

with the Powerquest and On

Technology acquisitions.The

Powerquest acquisition gave it

capabilities in imaging, provi-

sioning, storage management,

and disaster recovery.The On

acquisition added enterprise

management.

Gopal said that the “if you

peel back the skin of the prod-

ucts acquired through those ac-

quisitions, and compare them at

next level of detail, they com-

pare well with Veritas technolo-

gy, like NetBack up and Backup

Exec.They overlap at high level,

but not at a level of detail”.

He said that Symantec consid-

ered the move “overwhelmingly

the right one. It was a straight-

forward discussion. It is a

friendly merger, with the man-

agement teams aligned”.

The combined company will

operate under the Symantec

name. John W.Thompson, chair-

man and chief executive officer

of Symantec, will continue as

chairman and CEO of the com-

bined company. Gary L. Bloom,

chairman, president and chief

executive officer of Veritas, will

be vice-chairman and president

of the combined company.The

board directors of the com-

bined company will include six

members of Symantec’s current

board and four from Veritas’ cur-

rent board for a total of 10

members.

John W.Thompson said, in a

statement smacking of the tradi-

tional language of security – the

time-honoured ‘CIA’ of confiden-

tiality, integrity, and availability:

“The new Symantec will help

customers balance the need to

both secure their information

and make it available, thus en-

suring its integrity.We believe

that information integrity pro-

vides the most cost-effective, re-

sponsive way to keep business-

es up, running and growing in

the face of system failures, inter-

net threats or natural disasters.”

"Our customers have told us

that one of their most critical

needs is to enable 24x7 access

to information.At the same

time, they must maintain tight

security, comply with all regula-

tory requirements and operate

within their existing budget

constraints,” said Gary L. Bloom,

CEO,Veritas.

The revenue of the combined

company is expected to be ap-

proximately $5 billion for fiscal

year 2006, which begins in April

2005 and ends in March 2006.

Approximately 75% of the rev-

enue of the combined company

is expected to come from the

enterprise business, and 25%

from the consumer business.

Symantec's current ratio is

about 50/50. In addition, the

combined company will have

approximately $5 billion in

cash.

Since the announcement the

two companies have an-

nounced the structure of the

team responsible for managing

their integration.They have also

engaged

PricewaterhouseCoopers to

provide merger and acquisition

services related to infrastruc-

ture planning and implementa-

tion, and Bain & Company to

help with the integration of

customer-facing functions.

Ed Gillis,Veritas chief finan-

cial officer, will lead the overall

integration planning and man-

agement efforts.

While no-one can doubt

the efficiency of inter-

net era communications, the

risks that it has created are

not always as obvious as mal-

ware and spam.The worry of

ensuring internal documents

stay secure in the face of

amendments, updates and

multi-user access are creating

a new responsibility for

workers.

New research by Vanson

Bourne, a market research con-

sultancy, reveals that users now

consider themselves personally

responsible if a document is

damaged or illegally accessed.

The report, entitled ‘The Risk

of Sharing’, also shows that de-

spite the perceived ease of

dealing with emailed docu-

ments, the reality is hours of

time lost updating and amend-

ing the attachments.

The good news is that the

importance of keeping docu-

ments secure and maintaining

their integrity is seen as a pri-

ority by management and that

pressure is, as demonstrated by

the report, being felt by the

staff. New legislation, such as

Sarbanes-Oxley, is ensuring that

regulatory compliance is being

strictly upheld and in the face

of recent prosecutions of ex-

Enron executives, the conse-

quences of getting this wrong

is clear.

But despite the pressure

and the time dedicated to

maintaining these documents,

the report claims that 90% of

business users have no aware-

ness of confidential metadata

that might be residing in the

document; that up to 60% of

amendments to documents

can be lost in the email trails;

and 82% of users would still

rather use hard copies for fi-

nal approval.Taking responsi-

bility without using the tech-

nology properly? It's a loss of

integrity all round.

Document sharing — the cross we have to bear?Nova Dudley-Gough

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