Seagate, Veritas Merger Outlined
November 17, 1998
San Francisco-The high road and low road meet in the pending merger between Veritas Software Corp. and the Network and Storage Management Group of Seagate Software Inc., a subsidiary of Seagate Technology Inc. While Seagate has successfully mined the desktop and workgroup backup market, Veritas has catered to enterprises with its line of Unix storage solutions. Together, the two companies promise to bring a top-to-bottom storage solution to end users, including backup and recovery, core operating system level storage, storage resource management and high availability.
The new company will retain the Veritas name, and top executives from both vendors will stay on board. Mark Leslie, current Veritas president and chief executive, will be chairman and chief executive. Terry Cunningham, who is Seagate Software's president and chief operating officer, will be the Veritas president and chief operating officer. Cunningham recently discussed the merger with VARBusiness senior editor/hardware Jan Stafford. Here is a tidbit from that meeting. Look for the Q&A in its entirety on the VARBusiness Web.
VARBusiness: What was the rationale behind Seagate Software's merger with Veritas?
Cunningham: At Seagate Software, we were asked to build and buy Unix technologies, companies and sales channels. We knew that NT [or Unix] alone would not win the storage game. That was the logic of why Veritas and Seagate Software should get together. Veritas, the dominant player in Unix storage management, needed to build and buy NT technologies and channels. The channels were the key to the whole deal.
The ability to go direct to the end user and sell storage management software is very limited. The whole point of this merger is to leverage the products gained by the merger through channels that we have today and that we expect to grow significantly. For a VAR working with Seagate Software, the merger brings access to way more technology. Today, for example, we sell primarily backup products with some management capabilities. The merger now adds to our storage management portfolio products we never had before.
VB: Some VARs felt that the merger was Seagate Technology's way of getting out of the software market.
Cunningham: Seagate Technology went into the software business for two reasons: One is the financial opportunity. Instead of spending $200 million to $300 million buying software companies, we just cut a deal to create a software company valued at almost $2 billion.
The second reason is [the strengthening of the] strategic value of Seagate technology. What the Veritas merger brings is 35 percent ownership of the largest storage management company and a much broader technology base than what we had at Seagate Software.
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