Bloom: Veritas On Track For $2B Year With Channel's Help

That's the message Tuesday from Gary Bloom, chairman, president, and CEO of Veritas, speaking to analysts and press on the company's earnings call.

Bloom said on the call that third quarter revenue from the company's two-tier distribution was up 18 percent compared to the same period last year, in spite of rumored challenges from EMC and its Legato software.

After the call, Bloom told CRN that the company's channel is growing strong, particularly in two-tier distribution. "I wanted to point that out in light of rumors that everyone wanted to take it away from us," he said.

During the call, Bloom said Veritas' licensing revenue for the quarter hit $287 million, up about 2 percent year-to-year. This compares to Legato licensing revenue of $41 million, which EMC officials said were up 10 percent year-to-year. Bloom admitted there was some impact at EMC-focused shops, but said that it was more than offset by Veritas' increased relationships with other vendors such as Network Appliance, Sun Microsystems and Hewlett Packard.

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About 34 percent of Veritas' revenue came through two-tier distribution, with 54 percent coming from direct sales to end users and solution providers. Bloom said that latter figure comes mainly from enterprise software such as Net Backup.

Bloom could not break out direct sales to solution providers vs. to end users.

At 34 percent, revenue that comes via two-tier distribution is the highest percentage of total revenue since the second quarter 2002, Bloom said. "That's as far back as my charts go," he said.

Most of Veritas' business through two-tier distribution comes from its entry-level Backup Exec software, along with a smaller amount of business from storage resource management and other applications related to the Windows market, Bloom said.

For the quarter, Veritas revenue was $497 million, up 11 percent vs. $447 million reported during the same quarter last year. Income was $96.2 million, or 22 cents per share, vs. $68.1 million, or 15 cents per share, last year.

As a result, Bloom said, the company is still on track to reach its goal of hitting yearly revenue of $2 billion for the first time.

For the fourth quarter, Bloom said he expects revenue between $530 million and $550 million, with earnings expected to hit between 22 cents and 24 cents per share. For 2005, Bloom said Veritas should continue to grow as the economy continues to recover and the impact from regulations such as Sarbanes-Oxley begin to be felt.