VARs, users weigh in on Symantec-Veritas deal

Posted on February 01, 2005

RssImageAltText

By Dave Simpson

There was no shortage of financial analysts willing to weigh in on the blockbuster Symantec-Veritas acquisition back in December when the deal was announced. But what do users and value-added resellers (VARs) think about the deal?

Last month, Robert W. Baird & Co. (www.rwbaird.com) reported the results of a survey of 46 resellers and 28 end users (as well as 44 current/former employees of the two companies).

Click here to enlarge image

Overall, the majority (74%) of the VARs greeted the deal with either positive or neutral opinions (see figure, above), but the fact that 26% of the resellers reacted negatively may indicate that the combined company faces challenges. Baird analysts report that VARs’ comments suggest a good deal of confusion regarding the strategy behind the acquisition, but more importantly, a surprising 48% of the resellers believe that the acquisition will cause Veritas to lose market share in the backup software market, while 20% predict an increase in Veritas’ share and 32% don’t think that it will change the competitive landscape (see figure, below).

Click here to enlarge image

It’s interesting to note the disparity in opinions regarding Veritas’ market share gain/loss between large VARs (revenues of more than $85 million) and smaller VARs (revenues less than $85 million). For example, while 35% of larger VARs predict that Veritas will lose market share, 61% of the smaller VARs expect the company to lose market share.

Users more positive

Click here to enlarge image

The end users that Baird surveyed were all current Veritas customers, with the companies’ annual revenues ranging from $150 million to $30 billion (average: $7.3 billion). Overall, end users reacted to the impending acquisition more positively than the VARs. For example, 26% responded positively, while 67% were neutral and only 7% had a negative view of the deal (see figure, right). Baird analysts report that anecdotal evidence from the survey suggests that the strategic synergies between Veritas and Symantec are not obvious to many of Veritas’ customers.

Representative of the opinions from users that reacted favorably to the deal was this comment: “It will position them to be a real threat to EMC, which seems to be putting together a complete data-protection package.” Representing the opposing view, one user commented: “I don’t get it.”

Click here to enlarge image

In any case, it appears that the Symantec-Veritas merger will have little impact on users’ buying plans for products from Veritas (see figure, right). On this point, Baird analyst Dan Renouard notes that “the purchasing decision-maker for backup products is often not the same individual responsible for security purchases, so we would not initially expect significant changes in purchasing behavior.”

Originally published on .

Comment and Contribute
(Maximum characters: 1200). You have
characters left.

InfoStor Article Categories:

SAN - Storage Area Network   Disk Arrays
NAS - Network Attached Storage   Storage Blogs
Storage Management   Archived Issues
Backup and Recovery   Data Storage Archives