Veritas, Symantec yet to reveal full strategy

By Rodney Appleyard

The recent news of Symantec's shares dropping drastically following its US$13.5 billion take over of Veritas has sent fear throughout the company, but according to analysts, this is to be expected since Symantec is going to need to make more acquisitions before it can make a long-term impact on the storage market.

Ian Birks, the chief executive officer of Ideas International, said that Veritas and Symantec were under incredible market pressures in their respective markets before the merger, which forced them to become one company as a protective, defensive move.

Birks said that Symantec's revenue stream was under pressure from Microsoft, which is in the process of creating anti-virus software to package with its products. Veritas was under pressure from its competitors, which have made a number of acquisitions too recently, such as IBM buying Tivoli and EMC integrating Legatto.

"Five years ago, Veritas was on its own as an independent provider of back-up software. However, things have changed dramatically now, and it is facing direct market threats. The reason for the sudden drop in shares is because of the uncertainty of the companies overall forward vision.

"In order for Symantec/Veritas to be a big player, it is going to need to invest a high amount of additional funds into Research and Development and it needs to adopt a broader strategy."

Birks mentioned that this initial move by Symantec might be step one of a number of moves to diversify the united company, but we cannot expect any great things from the company in the short term, because the products offered by the two companies are currently complimentary, but not synergistic.

"The current vision is not too compelling. This is the reason for the lack of confidence. It needs more parts of the jigsaw attached to it. So after the initial excitement, people are now asking: 'What is the overall strategy?'"

One of the ways in which it can do this, according to analysts from Ideas International, is for the company to fill gaps in its products line, by providing software management solutions, such as those offered by the likes of IBM and EMC.

Birks also said that it will need to look at stretching its offering more into the SMB space too, but it is too early to tell if this company is going to make it beyond its current position as the fourth biggest software company in the world.

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