Banking

John Thompson places his wager

After CEO John Thompson took the helm of Symantec, the security software giant has been active in acquisitions.

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By Robert Lemos
Staff Writer, CNET News.com

Symantec's CEO John Thompson is not new to the acquisition game. Since he took the helm of the security software giant, Symantec has snapped up a host of security companies and has looked outside its core market for additional acquisitions.

The $13.5 billion purchase of Veritas Software is his biggest bet yet. The deal will create a provider of products for a wide range of data tasks—from storage to protection to recovery. As such, it underscores

We are not going to lay off 6,000 people. We are going to look how to grow this business, not to cut people.
the new conventional wisdom that the enterprise software industry is ripe for consolidation.

The combined company is expected to generate some $5 billion in revenue within the next year or so, putting it on the map with other megasized software powers such as Microsoft, Oracle, and SAP.

CNET News.com's Robert Lemos talked with Thompson to get his thoughts on the merger and the future of Symantec.

This is the biggest software merger in history. How are you going to handle it?
It is the largest software company (ever to result from a merger), in the value of the transaction. It is not a little company buying a little company—it is two leaders in their respective spaces merging together.

My point is what we end up with is a company not only of great scale, but one that will have the fastest growth rate of any company—above $3 billion dollars in revenue.

Competitors believe that the acquisition may slow Symantec down. Can you integrate quickly?
Acquisitions are always challenging. What is interesting about this one is that it is not about product lines—we don't have overlapping product lines. It is about growing revenue in two different businesses.

We were starting to enter the storage management space with the acquisition of PowerQuest. What this does is allow us to expand that to the enterprise space.

There is clearly a lot of work to be done in the back office.

Was increasing competition from Microsoft a driver in the decision to merge?
No, it is not a reaction to Microsoft. In an industry like software, where Microsoft has an enormous footprint, there is always going to be a place to partner and compete.

That does not preclude us from reacting to any opportunities to work together with them.

What about your existing partnership with storage company EMC, a rival to Veritas?
I don't know if we have much of a relationship with EMC. We have had discussions together. Veritas competes with EMC in the storage management space for nonarray storage networks.

Customers want a broader capability from a smaller number of vendors, and they want it today.

I am more than willing to sit down with the team from EMC to see where we can find opportunities. This is about solving customers' problems. They want to be able to contract with one vendor for a more integrated system.

Do you believe that companies focused only on security have a harder time competing in the market?
We continue to be a security company. But I don't think—if you have an eye toward solving customers' problems—you can just be a security provider. This is not the first time we have made moves outside the security space, either. The PowerQuest and ON (Technology) acquisitions are examples.

Does this help Symantec shed its image of a company focused on the markets for home users and for small and medium-size businesses?
We have 1,500 sales people covering enterprise. You don't book 300 deals a quarter and billions of dollars only with small and medium businesses.

Will your sales teams find they are working at cross-purposes? How will you organize the more than 3,000 sales people you will have?
Many of them will find that they are working in some of the same spots. Now one person can go in and offer a greater diversity of products to our clients as well as a single system to fit their needs.

In the large companies, you want to have an account relationship manager. That manager will coordinate the sales and account activities.

Will there be cost-cutting measures?
We are not going to lay off 6,000 people. We are going to look how to grow this business, not to cut people.

Did Symantec ever consider building storage product lines internally?
We have been a very acquisitive company. How do you grow the scale required to compete? The notion of organic growth in this fast-moving market just doesn't work. Customers want a broader capability from a smaller number of vendors, and they want it today.  

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