Symantec-Veritas Merger Could Broaden Channel Opportunities

News of the merger, disclosed last week, drove Symantec shares down more than 8 percent on Thursday following the official announcement, while Veritas' shares dipped slightly after rising earlier in the week on speculation of the deal. Shares for both companies were relatively flat Friday, though Veritas' shares were down slightly and Symantec's were up about 1 percent.

So far, however, the market's reaction has been more guarded than that of Symantec's partners. Gary Cannon, president of Advanced Internet Security, a security reseller in Colorado Springs, Colo., says he has already been fielding calls from excited customers.

"We already have customers who also work with Veritas asking if we can help get them closer to the company," Cannon says. "We've spoken with other potential customers in the past few months about backup recovery solutions, but they weren't interested because they already used Veritas, so this should open some doors for us."

Symantec's newly rechristened LiveState Recovery, a backup and recovery solution, is one of the few products that overlap between the two companies, though they don't have identical features and Symantec is relatively new to that segment, having acquired the product line from PowerQuest last year (Symantec has other products, such as Ghost and PCAnywhere, but both are comparatively regarded as low-end tools). Cannon says the merged company should enable customers who carry products from both companies to qualify for volume discounts and other benefits once those products are all sold by the same vendor.

"We now have a lot of customers who don't quite qualify for certain benefit levels, but they will when we add in their Veritas products," Cannon says.

According to Keith Norbie, business solutions manager for Twin Cities, Minn.-based Nexus Information Systems, a reseller of multiple product lines that include Symantec and Veritas, for those who "drink the Symantec and Veritas Kook-Aid," the merger could be "the best thing since sliced bread," providing a unified console. And for those who sell competitive products from the likes of Network Associates, Trend Micro, CA, CommVault, EMC, and Bakbone, the deal is an opportunity to create uncertainty, he says.

Symantec's two top channel executives say the merger is a perfect union of complementary products and solutions.

"This is a very exciting opportunity for customers, and therefore for our channel partners," says Allyson Seelinger, Symantec's general manager of worldwide channels. "Information is only valuable if it's secure and available. This deal will allow our partners to take advantage of a broader array of products."

Randy Cochran, the company's director of North American channels, says he and his staff spent all day Thursday reaching out to partners once the deal was announced.

"The reaction has been very positive," Cochran says. "It rounds out the portfolio of what we can sell and position to our customer base."

Forrester analyst Steve Hunt says the merger of the two companies will benefit channel partners of both companies. While Veritas products have had a strong following among systems and storage managers, the company has not had the cache in the CIO suite and among chief security officers as Symantec has enjoyed, Hunt says. Conversely, the enterprise capabilities of Veritas' products promise to give the combined company a much stronger data availability story.

"If you think about it from the CIO standpoint, data protection traverses both security and storage, so this has the potential there for something interesting," Nexus' Norbie says.

"Symantec has been trying for some time to reinvent itself as 'not your father's anti-virus company,' into a serious enterprise-scale solution provider," Hunt adds. "It's such a beautiful merger, because Veritas and Symantec each keep their respective channels intact." But will that happen? "That's what I intend to recommend to them," Hunt adds.

Seelinger says the company's partners should have plenty of time to get comfortable with how to work with the new-look company. "Because the deal won't close until the second quarter of next year, we'll have plenty of time to prep the channel," she says.

As Symantec and Veritas try to prep the channel, companies such as CA, CommVault and EMC are preparing their channels to take advantage of the uncertainty. Yogesh Gupta, CA's CTO, says the combining of two rivals in different segments -- security and storage -- into one larger competitor doesn't really alter the landscape from his perspective. He argues that Symantec only covers "a piece" of the security solution. "In security, Symantec has only threat management and anti-virus," Gupta says. "They don't have much for the enterprise."

Among the pieces CA has that Symantec has, Gupta says, is identity and access management.

"That's a big piece," he says. But in an interview with VARBusiness, Symantec president and COO John Schwarz said the combined company will have a broad portfolio of data protection and security solutions.