Shareholders Vote 'Yes' On Symantec, Veritas Merger

Shareholders of both companies late last week approved security vendor Symantec's some $13.5 billion bid to acquire storage software vendor Veritas Software, Mountain View, Calif.

How solution providers will fare with the new company remains to be seen. In a CRN online poll last week, 37.7 percent of readers who participated said a combined Symantec-Veritas would mean more sales opportunities, while 43.4 percent said there would be fewer opportunities, and 18.9 percent expected no change.

Bill Rutledge, business development manager at CompuCom Systems, a VAR and systems integrator in Dallas that already sells both Symantec and Veritas products, said added revenue opportunity will have to wait for products from the two camps to be integrated, a wait that could last several quarters.

In the long run, a combined and fully integrated Symantec-Veritas could mean as much as 30 percent more revenue potential from the Symantec product line, Rutledge said. But more near-term revenue gains should appear if Symantec's channel-friendly management quickly loosens up restrictive channel policies that Veritas has historically maintained, Rutledge said.

"My hope is that it relaxes the Veritas side of the house, especially the traditional enterprise side, which offers the non-Wintel Unix products," Rutledge said, citing existing restrictions from Veritas that limit the territories in which a certified technician can service customers. "We're a nationwide company, and some restrictions don't work for us," he said.

Rutledge said he also expects that the new licensing and cost structure of a combined Symantec-Veritas will take several quarters to iron out, which will give CompuCom no other option than to continue to treat products from the two vendors as separate.

Pat Edwards, vice president of sales at Alliance Technology Group, Hanover, Md., which has been a Veritas partner but has not worked with Symantec, said he has seen a lot of positive changes in the way Veritas deals with its channel since the proposed merger was unveiled in December.

As a result, Edwards said he feels confident moving ahead with the combined entity. "I'm hopeful going forward," he said. "I look forward to representing the Veritas line, as long as the new company continues investing in R&D, and look forward to bringing the Symantec product line to my customers."

One joint Symantec-Veritas solution provider said the key to making the merger work lies in how the two companies integrate their sales teams. Veritas, for instance, did a poor job of integrating the team it got with its 2003 acquisition of application performance management software vendor Precise Software, the solution provider said.

"They couldn't get the storage salespeople to sell the application monitoring software," he said. "Now they will have security salespeople selling storage, and storage salespeople selling security. They're used to selling point products and are resistant to change. So the question is, will Symantec-Veritas cross-pollinate sales? It will be interesting to see how they do it."

A turning point for many channel partners who initially were concerned about the acquisition was the late April Veritas Vision conference in San Francisco.

For example, Tom Kuni, president of SSI hubcity, a Metuchen, N.J.-based solution provider, said that Symantec Chairman and CEO John Thompson's Veritas Vision keynote was one of the best articulated direction messages he has ever seen given by a CEO. "Thompson, being the son of a postal worker, delivered as good a message as his father ever did," he said.

In that speech, Thompson said a combined Symantec-Veritas would deliver joint product bundles on day one, and a common interface for both companies' products within six months of the close of the deal, now slated for July 2. Thompson last week gave no further details on the promised bundles or when they would be available.