Symantec-Veritas Merger Calls On Channel To Push Midmarket Growth

"If you could take the power of our brand and the power of our distribution infrastructure and package Veritas products, boy, that's pretty successful. That's pretty significant in terms of what the growth opportunity could be in the middle market," Thompson said during a conference call. "[There is] a very strong middle-market focus from Symantec, and we would clearly expect to be able to leverage Veritas's products in that segment."

The new company, which will operate under the Symantec name, plans to use its combined direct-sales force of about 3,500 people to target enterprise accounts, Thompson said. Cupertino, Calif.-based Symantec has invested to build up its sales force to about 1,500 personnel over the last few years, while Veritas brings a direct-sales force of almost 2,000 to the table, he said.

"We'll have a wonderful opportunity to now have a more solid focus on the large enterprise, based on all the success Veritas has had," Thompson said.

Solution providers said the Symantec-Veritas merger will create a combined company with tremendous breadth.

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"[Symantec's] acquisition of Veritas puts Symantec in a league of its own," said Steve Palange, president of TLIC, a Wakefield, R.I.-based solution provider.

The merger, a $13.5 billion stock-swap deal, is expected to close in the second quarter of 2005. The combined company is expected to produce about $5 billion in revenue for fiscal 2006, which begins in April, and have a staff of approximately 13,000. Gary Bloom, chairman, president and CEO of Mountain View, Calif.-based Veritas, will serve as vice chairman and president of the merged company.

"This is not just an important event for our two companies but a very profound and powerful event for the entire industry," Thompson said. The merger creates the fourth-largest software company in the world and the fastest-growing above $3 billion, he added.

The merger stands to reshape the software arena, creating a channel-friendly security infrastructure vendor that will compete with IT companies ranging from software giant Microsoft to storage kingpin EMC.

"With both the scale and the scope we're going to get out of this transaction, I don't think we need to worry about EMC taking our people. I think EMC needs to worry about how we're going to be focused on their marketplace and continue now to be even more competitive by putting security and availability of information together, solving a much bigger problem for the customer," Bloom said, when asked how Veritas plans to defend against rivals that might try to poach its personnel.

Symantec and Veritas have both partnered with and competed against EMC and Microsoft in the past, Thompson said. The merger "doesn't change that competitive or partnership profile," he said.

"Gary [Bloom] and I will reach out today to both of the leaders of those companies as soon as we're done here to make sure they understand what we're doing, and we have an opportunity to address that one-on-one," Thompson added.

The combination of Symantec's security portfolio and Veritas' backup products creates huge potential for product integration, according to Bloom. "Think about the Windows environment, think more specifically about an Exchange environment and what some of the key requirements around that are," he said. "Well, how do you manage it more effectively, how do you drive availability of it, how do you protect e-mails and Windows environments from viruses, how do you filter spam, how do you provide compliance? We have a lot of integration opportunities to put these things together to create a really compelling value proposition."

MATT VILLANO contributed to this story.