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Bloom Readying Veritas For Open-Source Software Shift
Tuesday November 25, 10:19 am ET
By Brian Deagon
Heads turned when Gary Bloom left behind a 14-year career as senior vice president at Oracle Corp. and joined storage software company Veritas Software Corp. (NasdaqNM:VRTS - News) in late 2000.
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But the move is looking better all the time. Veritas was a $1.2 billion company when he took the reins as chairman, president and chief executive. Bloom expects sales of $1.7 billion this year. Veritas is now the fourth largest independent software company.
The company's software supports a wide range of computing platforms. That's a big selling point for customers these days. They want better, tighter integration of all their computing systems, and Veritas can help achieve that.
Veritas also has joined the movement toward open-source software, such as the Linux operating system - the underlying code of which is shared freely among programmers. It recently struck a partnership with SuSe Inc., a maker of Linux software.
Bloom spoke to IBD about industry trends.
IBD: What is your interest in SuSe?
Bloom: We're seeing considerable interest from our customers in Linux running with SuSe. In the Linux area, there are multiple implementations being used. And by all appearances Linux is heading into the enterprise in a pretty significant way.
IBD: Is the shift to open-source software like Linux part of a natural sequence of events?
Bloom: The industry analysts were forecasting that it would dominate the computing world three to five years ago. I believed it would be a very big trend but, like most technology shifts, it would take dramatically longer than most people think. It's been going on now for about six years.
IBD: Where are we in this process?
Bloom: Right at the beginning. Linux and open-source software is becoming viable in the enterprise. We're very much seeing the early adopters get very aggressive with it. Some customers have bet their computing environment on it. The success or failure of these early adopters will determine whether it will dramatically accelerate.
IBD: Where is open-source software having the most impact?
Bloom: It's in what we call the middle tier, meaning the Web servers and application servers. The first place open-source will get traction will be right on the fringe of the enterprise computing environment, which is where we've already seen a massive collision of two giants, between Unix and Windows.
IBD: Is open source turning tech into a commodity product?
Bloom: There is an ongoing commoditization of the computing platform. The value shift in the industry has always been from hardware to software.
The industry will continue down a path of consolidation. Customers will continue to turn to a smaller number of vendors to serve a broader piece of their computing environment. People are going to take all of that commodity computing power and create a shared infrastructure to run computing as a utility.
IBD: How do you define utility computing?
Bloom: It's tapping into the company's network to get all the computing power you need. A user should be able to access all their systems, broadly, through the entire company. Each company is its own separate utility. A shared infrastructure creates a computing model where customers can get high performance at a much lower cost.
IBD: How does Veritas fit into all this?
Bloom: What we offer is a whole series of technologies that I view as the building blocks to enable utility computing. I can walk into an existing shop, and that has 10 or 15 different hardware and software vendors, and I can tie them altogether into a shared infrastructure. Our customers want to run their HP environment the same way they run their IBM environment and their EMC environment.
Veritas lets them run the systems they have today and get better use of their hardware and labor.
IBD: How far along are customers in adopting utility computing?
Bloom: We are so early in the trend. It won't come as fast as some would like, because it's going to need all the success stories, the proof points, the validation that says this truly is a lower-cost way to run computing.
We'll have to prove the viability of utility computing in the open- source arena before it's going to get the traction to be a truly disruptive change in the industry.
IBD: What does tech spending look like to you for 2004?
Bloom: In our last earnings call we didn't provide real specific guidance. We think IT (information technology) spending for next year is still a question.
I don't think the industry or anybody can know exactly how IT spending is going to look next year because more and more companies are still working on their budgets and plans. In a booming economy, you might have done your business plan as early as August.
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