Symantec's Vision Quest

Symantec Chairman and CEO John Thompson says his company has made great progress over the past nine months integrating the technology piece of last year’s landmark $10.25 billion acquisition of Veritas Software. And he can certainly point to some other accomplishments as well: the uniting of the two companies’ e-mail infrastructures, realigned engineering teams in the business units, integrated deal-registration systems and a new streamlined channel program that retains popular parts of each vendor’s program and simplifies partner classifications.

Yet, as Symantec executives get ready to outline the next phase of the vendor’s technology integration at Symantec Vision in San Francisco this week, Thompson faces mounting pressure to show value from the merger in light of the fact that the company’s stock has taken a beating since the deal was announced in late 2004. And, since 80 percent of the vendor’s annual revenue—$2.6 billion in 2005—flows through channel partners, one of the most closely watched aspects of the merger continues to be the integration of Veritas’ traditional direct sales culture into Symantec’s channel.

Thompson admits that there is still a lot of work to do before the grand vision is realized. “When you do something as significant as this, I think of it as an evolving work in progress,” said Thompson. “The evolution over the last nine months allows us to think more holistically about what [Symantec and Veritas] as a team can do.” Once the sales reorganization is completed by January of next year, he said, there won’t be any distinguishable differences between the two companies.

One of the main goals of the merger, company executives said, was to develop a synergy between the two product lines that would help solution providers take steps to specialize in both security and storage. Whether that vision is being realized—and whether it’s happening fast enough—seems to be a matter of who you talk to. Several solution providers that partnered with only one of the vendors before the acquisition told CRN they’re in the process of picking up the other’s product line. But some VARs that have longstanding relationships with both vendors said the direct sales culture of Veritas is still readily apparent and continues to be a sore spot. And, unfortunately for Symantec, more than a few solution providers voiced doubts as to whether the expected synergy will ever materialize, saying they believe Thompson’s vision is simply a bridge too far. However, most solution providers CRN talked to appear to grasp the immensity of what Thompson is trying to accomplish and are willing to give him more time.

ADDRESSING CONCERNS
Going into the merger, one of the main concerns Symantec partners had was that Veritas’ direct sales culture would be difficult to integrate into a merged channel program.

Julie Parrish, vice president of Symantec’s global channel sales and strategy, said the vendor began to address those concerns first by eliciting feedback from partners. “In designing the [new] program, we asked partners what they liked about the programs and what we should keep,” she said. As a result, she said, some elements of both vendors’ channel programs have been retained in order to assuage fears from channel partners on each side about how the merger would impact them.

For example, Veritas had a policy of requiring certification for partners before allowing them to sell high-end multiple platform storage products such as Net Backup, Command Central and Storage Foundation, and Parrish says this policy has been carried over. “Veritas partners said they wanted to keep the certification policy in place because it goes a long way toward keeping margins healthy,” she said.

Pat Edwards, vice president of sales at Alliance Technology Group, a former Veritas partner in Hanover, Md., said he likes what he’s seen on that front. “The channel program infrastructure Symantec has brought forth and incorporated has been positive for us legacy Veritas folks because it gives us a chance to make money selling licenses again and protects us against bidding wars,” he said.

To help allay Symantec partners’ fears of channel conflict with Veritas’ direct sales force, Symantec has instituted a policy in which salespeople who take deals direct will lose their commission. “That’s something we as partners asked Symantec for and we got it,” said Steve Barone, president of Creative Breakthroughs, a Symantec Platinum partner in Shelby Township, Mich.

However, not everyone is satisfied with the progress on the channel integration front. Several solution providers, for instance, said they were getting conflicting information related to the integration of the Veritas channel. Marty West, district sales manager at DynTek, an Irvine, Calif.-based solution provider, said there are still foggy areas when it comes to who’s taking responsibility for addressing certain problems, such as when customers have questions about upgrades, maintenance and support contracts, and renewals.

One solution provider who requested anonymity was a partner of both companies and says he has historically had difficulty getting support from Veritas. And although he hoped support on the Veritas side would improve after the merger, he said that hasn’t been the case. The source said he has encountered resistance when it comes to getting presales support on legacy Veritas products. When his staff recently called for support on a 60-day trial version of Backup Exec, they were told that Symantec wouldn’t provide it unless they were certified on the product. “After considerable discussion, they relented and gave us a 60-day grace period to receive support ‘while we pursued certification,’ ” the source said. “Our concern is that the product should work and they should support us.”

A spokesperson for Cupertino, Calif.-based Symantec said certification is not required in order to sell or get technical support for Symantec Backup Exec and Symantec’s inside sales teams provide presales support for free.