EMC RSA Pres Evaluates EMC-RSA Vs. Symantec-Veritas Mergers
"I won't talk too much about my competitor," said Coviello in an interview with CMP Channel. "I'd rather talk more about RSA and EMC. But the one thing I will point out is that at the time of the Veritas Symantec merger, (Symantec Chairman and CEO) John Thompson talked about a category called Assurance, combining information security with backup recovery and archiving. Not a bad premise. The problem is you can't do it with antivirus and the assets of Veritas. With EMC and RSA (you had products) protecting access to the data center, having strong user authentication, encryption technology. None of which Symantec had. RSA had all of those assets heading into the merger. So we were in a much better position to create this category of Assurance than Symantec ever was or quite frankly I think ever will be."
Coviello's comments come at a critical time for Symantec which last week restructured and added new leadership positions as part of move to improve the performance of both the Symantec and Veritas businesses. The restructuring puts in place the same operating unit model Veritas had before it was tightly integrated into Symantec.
Symantec's $10.25 billion acquisition of storage giant Veritas, completed nearly three years ago, stands as one of the largest deals in the technology industry in the last five years. Before the merger, Symantec had sales of $2.7 billion, while Veritas had sales of $1.75 billion.
In contrast, EMC's $2.1 billion acquisition of RSA, completed nearly two years ago, was a much smaller deal. EMC had about $10 billion in sales at the time of the deal, while RSA had only about $310 million in sales. That said, there was a big difference in the post merger tack taken by the two companies. EMC set RSA up as the security division of the storage giant and took a hands off approach. Symantec, meanwhile, moved quickly to tightly integrate the two behemoth organizations.
What's more, one time Veritas CEO Gary Bloom, who became vice chairman and president of Symantec following the deal, stepped aside only nine months after the union. Coviello remains the RSA boss and is looking forward to continuing to grow that business. RSA sales, in fact, have grown about 20 percent annually since the acquisition making the division a $500 million plus business for EMC.
"EMC has a philosophy in terms of their acquisitions which is in line with the Hippocratic oath: first do no harm," said Coviello. "So they did nothing to blunt our growth momentum. We planned it pretty well. I think the other thing quite frankly what I have loved about working with EMC is the lack of egos getting in the way. Having acquired a number of companies I knew how I wanted the CEO of the acquired company to behave. So I think we were a little bit more mature, myself and my management team, as we got acquired by EMC. And EMC understood and respected the talent we had and the subject matter expertise. So the ego thing has never been an issue."
Coviello said EMC-RSA is both a good strategic and cultural fit. "Security needs to be built into the infrastructure," he said. "We have got a number of proof points as we are building our technology into EMC's product portfolio. So the strategic rationale was there. Cultural compatibility was fantastic. Both companies are innovative, results oriented, hard driving. So cultural compatibility was great."
NEXT: The Channel Differences Between EMC- RSA Versus Symantec-Veritas
There is also a difference between how the two organizations handled the channel once the mergers were completed. Symantec moved to integrate the two channel programs. RSA, meanwhile, retained control over its channel program and strategy so it remained unchanged even after the EMC deal.
Coviello pointed out that many RSA partners feared a big clash with EMC's vaunted direct sales force at the time of the deal. "EMC has had a fantastic reputation as a direct sales organization," he said. "They are absolutely killers. Having said that, RSA has had an incredible reputation with the channel. At the time of the acquisition, our channel partners were pretty nervous. Well two things have happened one is as I said is we were largely left alone so our channel has continued to thrive. Second, EMC over the last 18 to 24 months has done a lot to embrace the channel. So now there is an opportunity to really sell both products. So I think you'll start to see more of a merger in terms of product and solutions in the channel. So the channel can also bring a lot of this together."
Coviello recently addressed EMC's Western sales division emphasizing the importance of channel partners to tackle the big security/storage opportunity. "What quickly came up in the discussion is that we need channel partners to help us cover the opportunity," he said. "So a lot of work that you'll see us doing as we continue to refine the model of engagement between RSA and EMC will be channel focused and channel specific. In terms of that one of the other things we said at the conference and this goes for the channel partners as well who sell storage is that because security is such a critical component of the data center infrastructure you should never be selling without bringing up the security conversation. We likened it to selling fries with the Burger. So to the extent that you can get the security conversation going, get trained up and understand the products and solutions of the combined company then you are Super Sizing the deal that you are going to get. But because I think the trend in security is increasingly going to be viewed as an information risk management problem, I also think it behooves the channel to really get a better understanding of information risk and look at offering those kinds of services as well."
In response to Coviello's claims that EMC RSA has a better security-storage story, Julie Parrish, vice president of global channel sales and strategy, points out that Symantec staked a claim as an industry leader by being the first to initiate the marriage of security with storage -- a model which made it easier for competitors to initiate their own integration strategies. "I would say that it's far better to be a market leader than to be a follower," she said. "It was a bold move -- a first-in-the-industry move. What you see now is the following. Companies will now be in a better position to follow."
Parrish said that Symantec had the foresight to see that this kind of bold integration was where the industry was eventually headed. She added that the decision was validated with the fact that others followed suit. "That really speaks very strongly to Symantec's vision and correctness of the move," she said. What's more, she said, Symantec continues to see the value of combining security and storage products and solutions.
Both EMC's Coviello and Symantec's Thompson will get a chance to make their case on the security-storage integration issue at the RSA Conference 2008 April 7-11 at the Moscone Center in San Francisco. Coviello kicks off the conference in a keynote session followed by Thompson.
Stefanie Hoffman contributed to this article.