Veritas Rising

Appropriately, Symantec will call its new information management spinout Veritas Technologies Corp. The company will consist of many products from the original Veritas, which Symantec acquired in 2005.

Let me say that I think the spinout is a great move. The storage management software products that are the foundation of the new company are different from Symantec’s security offerings. The focus of Veritas will be on the management of storage and information. The tangential (but related) areas will no longer be distraction. And as a public company, the valuation will be on the storage management products.

This should benefit the future of Veritas and the products. For a company to be successful over the long term, it must invest in research and development. There is no way to have long-term success by using the “saving your way to profitability” approach some executives take by cutting development and staff when their stock is pressured. These actions destroy a company’s future. With the new focus on the Veritas products and business, the company can make the necessary investments to improve its products to continue and increase revenue streams. Also, it can produce extensions of those software technologies with new market opportunities. New products can also come over time.

It is easy to look back on the Symantec acquisition of Veritas and say that it was a bad move. Many did say that, including some within the company and independent analysts. From our perspective at Evaluator Group, we were skeptical of the acquisition because the people who make decisions and purchases in organizations are different for security and storage management. That meant there was little credit given for a company that acquired another set of technology products. If anything, it led to concern of long-term viability.

The Symantec-Veritas history should serve as a lesson for others wanting to merge companies with dissimilar products (the positive phrase is “complementary solutions”) where there is no real synergy in sales and marketing and the customer purchasers are different. There will be a number of “I told you so’s” but that is not productive. What is important is that the new Veritas focuses on making the right moves to be successful.

Now Veritas can rise again as a storage management software company. There continues to be great opportunity for an independent company. The company will need talented people, agile management, and a corporate vision that can be clearly articulated. This will be great study of corporate dynamics and evolution.

(Randy Kerns is Senior Strategist at Evaluator Group, an IT analyst firm).