Sidebar: Planned Purchase Leaves Some Veritas Users Cold

Several Veritas Software Corp. users reacted with dismay last week to the news that Symantec Corp. plans to buy their storage management software provider, saying the deal is analogous to trying to fit a square peg into a round hole.

For example, Steve Rupprecht, a technology consultant at a large brokerage based in the Midwest, said he's concerned about the planned acquisition because he equates Symantec's software with PCs and Veritas' products with data center systems.

Rupprecht's company, which he asked not be identified, uses multiple Veritas tools to manage an 80TB storage-area network. "I just wonder if Veritas or its products would be thought of as small if Symantec were to buy Veritas," he said, noting that his concern is heightened by the fact that Veritas rival Legato Software was bought by storage hardware vendor EMC Corp. in October 2003.

The planned combination of Symantec and Veritas is "an odd match," said Jesse Correll, manager of IT infrastructure at MetLife Inc.'s MetLife Investors Group Inc. unit in Newport Beach, Calif. "I just don't see the gain between the two." But Correll, who uses Veritas' BackupExec software, added that he isn't worrying about the merger's possible effect on his company. "If all else fails, I'll look for a new backup platform," he said.

John Halamka, CIO at Boston-based CareGroup Inc., said he's not sure how Symantec and Veritas will fit together considering that they come from different ends of the technology spectrum. CareGroup, which operates six hospitals, uses Veritas' backup software and the application performance management tools that the vendor acquired when it bought Precise Software Solutions Ltd. in June 2003.

"Perhaps we'll end up with a supplier market that gives IT operations only two or three choices," Halamka said. "If you mix and match products coming from more than one alliance, caveat emptor."

Jon Oltsik, an analyst at Enterprise Strategy Group Inc. in Milford, Mass., was bullish about the merger deal, a stock-swap transaction that was valued at $13.5 billion based on the closing price of Symantec's shares last Wednesday.

An increasing number of Wall Street firms are appointing chief risk officers who oversee security, data protection and disaster recovery, Oltsik wrote in a research note. "As this trend propagates across industries, Symantec's 'information integrity' theme will move from vision to common sense, and the combined company will be in the catbird's seat to take a leadership position," he added.

But that won't happen overnight, cautioned Nitsan Hargil, an analyst at brokerage Friedman, Billings, Ramsey Group Inc. in Arlington, Va. "In all likelihood, we are still at least five years away from seeing major enterprises buying all-inclusive management software packages to run their networks, security and storage," Hargil wrote in a report.

Copyright © 2004 IDG Communications, Inc.

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