When Worlds Collide

"Talk about great news--now we'll be able to offer security, availability, storage and disaster recovery all at once," said Bill Rutledge, software business development manager at CompuCom, a Dallas-based reseller that sells products from both companies. "When you go to a customer and tell them you can handle all of those things with one set of products, it definitely makes a lasting impression."

The deal, announced last week as an all-stock transaction, will bring together market leaders in security and software to provide enterprise customers with a more effective way to secure and manage data, observers said. The accord also will reshape the software landscape, creating a channel-friendly security infrastructure powerhouse that will compete with a wide range of rivals from software giant Microsoft to storage kingpin EMC.

Under the agreement, the new organization will operate under the Symantec name.

John Thompson, chairman and CEO of Symantec, will remain chairman and CEO of the new company, while Gary Bloom, chairman, president and CEO of Veritas, will become vice chairman and president.

John Schwarz, Symantec's president and COO, said the company's stable of nearly 30,000 partners, combined with hundreds of enterprise-level solution providers from Veritas, should create a formidable channel.

Michael Sotnick, vice president of partner sales at Veritas, Mountain View, Calif., said the combined company plans to spend more on the channel together than the two vendors did separately. "This is a game-changing announcement that brings channel assets into the forefront of delivering on the growth potential that is inherent in these two organizations coming together," he said. "The channel will continue to be center-stage as a key element of our go-to-market strategy."

Allyson Seelinger, vice president of global channel sales and strategy at Cupertino, Calif.-based Symantec, agreed. While she was guarded about details, Seelinger pointed to synergies between the companies' product lines as the foundation for new solutions.

"We have complementary product lines that will allow our partners to sell a much broader set of products to their customers and be able to meet a broader set of needs," she said. "We see this as an enormous opportunity for all of our partners."

Many solution providers, such as Darrel Bowman, CEO of Apptech, a Symantec and Veritas reseller in Tacoma, Wash., were enthused by the alliance and hailed it as the first "major salvo" in the convergence of storage, systems and security management as an industry.

"What Veritas lacked in channel strategy and relationship development, Symantec is sure to bring to the table," said Bowman, who predicted he could increase Veritas solution sales anywhere from 20 percent to 30 percent in the first 18 months.

The combined company will have a tremendous opportunity to distinguish itself from competitors by integrating technologies that traditionally have existed in separate silos, said John Freres, president of Meridian IT Solutions, a Schaumburg, Ill.-based solution provider. "It's going to force some of these security-only or storage-only companies to figure out a way to [partner through] ecosystems or co-opetition," he said.

Tom Kuni, president of SSI Hubcity, Metchuen, N.J., predicted the Veritas deal will not be the last major move Symantec makes in the data management space. Kuni said he would not be surprised to see Symantec bring in an identity management piece.

Still, not everyone was convinced the move was a smart one. Dave Condensa, president and CEO of Helio Solutions, Encino, Calif., said while Symantec may be ready to merge security and storage under one umbrella, it means nothing if customers are not equipped to handle the change.

"From our experience, the Veritas guys are calling on IT organizations and database guys, while Symantec tends to sell to different groups," he said. "For us, the challenge [will be] trying to take one sales rep and tell him that he is going to go call on both organizations [with the same product suite]."

And at Troubadour, an enterprise Veritas reseller in Houston, Jay Kirby, vice president of sales, feared that by expanding its efforts into storage, Symantec may be overextending itself. "It's very possible they could become another Computer Associates [International], and in my opinion, CA is a Sears catalog of products with no integration at all," he said. "Only time will tell."

JOSEPH F. KOVAR and JENNIFER HAGENDORF FOLLETT contributed to this story.