Last year, EMC reached outside its traditional storage space to acquire Documentum. We all blinked. Why Documentum? With some cogitating it began to make sense. After all, how does a storage company really deliver on the information life-cycle management (ILM) promise without something like a Documentum?
Then EMC bought VMware. We blinked again. VMware? If Documentum was a stretch for a storage player, VMware seemed like a leap into the abyss. But then we reflected some more and began to realize that, in a computing world where everything was getting virtualized-servers, storage, applications-adding VMware to the ever-expanding EMC fold could make sense, too.
Now comes Symantec, carrying a bouquet of stock certificates, to woo Veritas. Symantec, the scrappy security player, is courting the grand dame of storage software. It’s a matchup without precedent in the storage industry. At about $13 billion, it’s the blockbuster storage deal of 2004-and probably 2005.
Here’s my take: Symantec wants to be a risk management player. It is now clear that enterprises of all sizes must do at least two things well in order to survive: execute on the business plan, while at the same time continually managing and mitigating business risk. Microsoft has chosen the business application road to the enterprise, while opening some risky security gaps along the way. Symantec wants to fill those gaps.
Veritas’ Vision 2004 conference last year was all about utility computing. But I wondered how Veritas was really going to pull this off. Storage is great but it isn’t the “be all and end all” of utility computing-far from it. Although Veritas’ customers (for the most part) think the company’s storage software is great, I don’t think they really see Veritas as being capable of supporting a utility computing model that could compete with the likes of IBM’s On Demand or HP’s Adaptive Enterprise, for example.
I left Veritas Vision wondering if Veritas had gone about as far as it could go within the storage domain and was now looking beyond storage for new growth. However, if that really was the vision, the problem at that time was Veritas’ inability to address network management. It was hard to see how the company was going to make a successful utility computing play without at least a presence in network management.
In December, I read a Business Week cover story about Hewlett-Packard that included a conjecture that HP might buy Veritas. Now, Symantec scoops up Veritas. Clearly, Veritas was in play. Could some influential Veritas stakeholders have been thinking about limited growth potential as well and concluded it was time to look for a suitor?
The Symantec-Veritas deal says that storage is a great place to get started, but you can only grow so far. After that, it’s acquire, be acquired, or cease to exist. That’s the lesson of EMC-Legato, EMC-Documentum, and EMC-VMware. It’s good news for vendors that are likely to be acquired this year, but it may be bad news for others.
One more point: Veritas caught the eye of a major player outside of the storage domain. Match this acquisition with acquisitions such as Broadcom-RAIDCore and we could see an emerging trend for 2005.
John Webster is a senior analyst and co-founder of the Data Mobility Group consulting and research firm (www.datamobilitygroup.com) in Nashua, NH.