April 25, 2005 1:08 PM PDT

Veritas CEO defends Symantec acquisition

SAN FRANCISCO--Veritas Chief Executive Gary Bloom took pains to explain why he believes his company's acquisition by Symantec makes sense, arguing on Monday that the companies' products address two facets of the same data protection problem.

Customers use Veritas software to protect data from risks such as computer crashes or storage system catastrophes, while Symantec protects data from network threats such as viruses or hacker attacks, Bloom said in a keynote address at a customer conference here. The two companies hope to be stronger together than separately in the work, he said.

"This is the convergence around information security and availability," Bloom said. "Our strategy is to drive performance, availability, automation and security of your information technology environment."

It's a message that has been received coolly by Wall Street, which has sent Symantec's shares down more than 40 percent since the $13.5 billion acquisition plan was announced in December. Bloom said more-important audiences have been more receptive to the news, though.

"I would not confuse Wall Street's response with customer response," Bloom said. "Customer response has been very positive."

Others remain more guarded. "I think Veritas is stronger as an enterprise player on its own, with clarity of focus and mission," said Illuminata analyst Jonathan Eunice. "It may make sense from the Symantec point of view: Trying to become some kind of modern IT conglomerate--the new Computer Associates, if you will, only nicer."

The Symantec acquisition is one of several large mergers reshaping the software industry. Oracle bought PeopleSoft for $10.3 billion, and Adobe is seeking to buy Macromedia for $3.4 billion to expand digital content-creation tools.

There's more to come, Bloom forecast.

"This is only the beginning of the consolidation," Bloom said. "Availability, disaster recovery, compliance and security all blend together. That is the problem we're addressing. We're at the early wave of that trend. This is a proactive move to get ahead of where we see the industry going."

Symantec's Veritas acquisition is scheduled to close by the end of June. The companies are working to get products to interoperate, but a second phase of work, in the next six to 12 months, will integrate the two companies' products more closely, Bloom said.

Licensing complaints
During a question-and-answer session after Bloom's speech, one audience member drew widespread applause by asking what Veritas was doing to simplify software licensing. The company spends too much energy on license tracking, reconciliation, renewal and other matters.

Bloom acknowledged the problem and said it's being fixed.

"We need to improve and simplify licensing of our technology and the management of our software assets that we provide to you," he said. The company has made some smaller improvements but is working to find a much more sweeping solution, he added.

"We have a dedicated team working on nothing other than simplifying how we license our software and how we simplify installation," Bloom said. That work will continue with the Symantec acquisition, he added.

 

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