Symantec: Heading In A New Direction

The acquisition, which was completed on June 30, gave Veritas the ability to proactively detect and correct application-performance problems before end users are aware of them, in addition to all its other storage and availability capabilities. That deal got Winn thinking about his company's own limitations, including those beyond the systems-management solutions it offered.

Among other things, PowerQuest had limited penetration and distribution overseas. In addition, its brand was hardly a household name. One option to grow the company was to tap into the improving capital markets. The company was considering an IPO and figured with its growth (PowerQuest had a goal of reaching $200 million in two years), revenue run-rate and technology focus, it could generate perhaps as much as $100 million from the sales of shares.

But the Veritas news got Winn thinking: Perhaps it was time for PowerQuest to join forces with another vendor. Enter Symantec, which bought PowerQuest in December for around $150 million. Over the years, Symantec has better integrated acquisitions than almost any other major software company. So many deals are brought to its door that the security software giant has had to create a form on its Web site just so parties interested in selling their companies to Symantec can formally submit their proposals. With near clockwork precision, the company has snapped up SecurityFocus, Recourse Technologies, Riptech, Mountain Wave, Axent, 20/20 Software, L-3 Network Security, URLabs, Quarterdeck, Binary Research and others.

Why would Symantec want PowerQuest? Simple: PowerQuest completes Symantec's value proposition, Winn says. Customers would no longer have to go to one company for help detecting and preventing malicious attacks, and then another to help them get back up and running if and when a security breach occurs.

For PowerQuest, marrying with Symantec made a lot of sense. In addition to the technology synergies, the companies share similar sales philosophies. In both cases, more than 90 percent of revenue flows through partners. And each is making strides with increasingly larger partners. PowerQuest, for example, has established close ties with both Computer Sciences Corp. and IBM Global Services. With PowerQuest's Active State Management technology, one company will be able to provide customers with "the solutions necessary to build, manage and protect their IT infrastructures," according to the marketing and PR materials Symantec prepared in advance of announcing the deal. But that description hits squarely on the head of what the two companies hoped to provide.

With each previous deal, Symantec has folded its purchases into its day-to-day operations. PowerQuest, however, will run as Symantec's first free-standing independent business unit, Winn says. Sure, the company, which is based in the old offices of WordPerfect in Orem, Utah, could theoretically be melded into Symantec's business. For starters, it's not like the PowerQuest brand is so widely known that its brand equity is worth preserving at every turn. Furthermore, both Symantec CEO John Thompson and Winn are former IBMers cut from similar cloths, so their cultures should mesh well. The reason why it makes sense to run PowerQuest as a separate business unit, Winn insists, is that the company's technology is complementary but distinctly different than what Symantec has in its current portfolio.

While Symantec specializes in antivirus and other security offerings, PowerQuest focuses on three market areas: enterprise-storage life-cycle management, personal-data management and imaging products, and factory life-cycle storage management. Each of these areas contributes roughly one-third of PowerQuest's revenue, which will likely reach $60 million this year. Of these three areas, the company's V2i Protector backup and disaster-recovery and V2i Builder automated and centralized management solutions are the fastest-growing parts of the company.

The key question now becomes whether you'll look to one company for all of your security, backup and data-protection needs, or instead continue to rely on multiple companies to help you create best-of-breed solutions. My gut says over time, you'll go with the former. Let me know if you see things differently.