Symantec's Thompson Promises To Fix Veritas' Channel Woes

"We have an opportunity to improve, candidly, the focus and results that Veritas has had because of our channel-friendly approach," he said, acknowledging inconsistency in Veritas' channel friendliness.

In recent quarters, Veritas partners have seen an increase in channel conflict, according to Dan Renouard, an analyst with equity research firm Robert W. Baird. The only time Symantec will fulfill directly is when it's a services deal or contract requirements stipulate, Thompson said.

"That consistency and predictability gives the channel, I think, a level of comfort and confidence in our behavior regardless of what the size of the transaction might be or the margin might be," he said. "If it all follows what Symantec has seen, we will end up with more business sourced through the channel at a higher margin."

According to a survey by Milwaukee-based Baird of 46 Veritas VARs with a combined revenue of $6.6 billion, partners have mixed views about the deal, stemming from overall discontent with Veritas' recent channel practices. While one-third, or 33 percent, are bullish about the deal, more than one-quarter, or 26 percent, are negative about it, according to the report.

"The reseller feedback on Veritas has been very negative," Baird's Renouard said, adding that channel discontent has declined in recent quarters. "They are a channel-unfriendly partner, to put it mildly...They are not as easy to deal with as IBM, EMC and some of the other players."

VARBusiness' own 2004 Annual Report Card also found Veritas with partnership challenges. Indeed, Veritas sharply pared back its number of storage partners during the course of the past year. Ironically, Veritas' key channel executive, Michael Sotnick, last week left Veritas to join SAP America.

Yet, despite the defection of a key executive, 62 percent of Veritas' employees are enthusiastic about the Symantec deal, while only 19 percent are negative, according to a separate Baird survey of current and former Veritas employees. On Tuesday's call, Thompson indicated the company is optimistic about retaining key talent.

But the Symantec-Veritas deal faces other potential pitfalls. For example, the Baird partner survey found that VARs anticipate Veritas at risk of losing share in the market it dominates -- backup and recovery software. Nearly half, or 48 percent, expect Veritas' share to decline, while only 20 percent predict it will increase.