* Potential benefits of Symantec’s proposed acquisition of Veritas
Symantec’s recent bid for Veritas Software makes sense on a number of levels – for end-to-end protection against viruses and other threats, for regulatory compliance and for support for the virtual workplace. The deal combines Symantec’s security products with Veritas’ data-storage software, and the new company, which will retain the Symantec name, will offer products covering everything from the PC to the data center.
The deal highlights some critical issues. Recent benchmarks by Nemertes Research illustrate that on average more than 80% of enterprise employees access data centers remotely. Maintaining the security of corporate data is no longer simply a matter of building a hard perimeter around the data center, as most end users will be outside the perimeter. Data-center security depends on all three components of application delivery – the servers, the desktops/laptops/PDAs, and the WAN transport in between.
The combination of Symantec’s core security technology and Veritas’ experience in data management (specifically data protection, storage and server management, high availability and application performance management) could potentially give users an integrated set of products that makes security and compliance integral parts of their infrastructures. Furthermore, Symantec and Veritas could offer comprehensive e-mail management from the desktop to the e-mail server, incorporating anti-virus and anti-spam software, as well as e-mail archiving and backup. Comprehensive e-mail software would assist companies facing regulatory compliance pressure to protect information from being inadvertently disclosed or lost through e-mail.
That said, the market’s reaction has been negative, due primarily to the inflated size of the deal and the mismatch between its perceived value (to Symantec) and the challenge of integrating the two companies’ software. At $13.5 billion, the merger offer surpasses in size the acquisition of PeopleSoft by Oracle. After the announcement, the market responded skeptically by taking off about $1 billion from the joint valuation of the two companies. Potential integration challenges between Symantec’s security management tools and Veritas’ storage management software will not surface until 2006, when the merged company intends to launch new, integrated products. Symantec and Veritas will need to create substantial value as a comprehensive security/storage company to justify the cost of becoming the world’s fourth-largest software company.
Nevertheless, the proposed merger highlights the fact that data center managers must take an end-to-end view and secure every component of application delivery, to deliver truly secure applications. Current Symantec/Veritas users should push the combined company to deliver integrated products sooner rather than later. Other software vendors are also advised to take note. Anti-spam and anti-virus vendors, in particular, need to expand their offerings to stay relevant in a maturing yet ever-changing market. Data-management vendors must consider themselves part of the world of information stewardship, and work with other companies to help customers protect and preserve their information.
