Veritas looks to diversify

The second-largest vendor of storage management software, Veritas Software, is planning to expand into other IT management technologies so it can better compete against more diversified rivals such as EMC, Computer Associates International and IBM.

Veritas officials said a series of recent acquisitions was part of a strategy to offer IT administrators a utility model that offered a bundled suite of products that could manage across storage, servers and applications.

The company's goal was to increase its annual revenue from $US1.5 billion to $US5 billion over the next three years, they said.

Veritas has announced three acquisitions since November, adding products in areas such as server provisioning and application performance management. The deals put the company into markets beyond storage management and server clustering for the first time.

Veritas' big task this year was to "consolidate and integrate the companies we acquired," the company's chief marketing officer, Jeremy Burton, said. "But I don't think it will be technology that hinders us. It will be execution [issues] if we can't do it."

An analyst at Giga Information Group, Anders Lofgren, said Veritas' expansion plan was a natural evolution. He predicted that other storage software vendors would follow suit.

"In the end, what you really want to be able to do is tie everything back to the application," Lofgren said.

He also said that for Veritas to build credibility outside of the storage management space would take some time.

In 2001, Veritas was second in storage management sales, with 17.4 per cent of the marketplace, trailing only EMC (28.3 per cent); CA (8.6) per cent, IBM (7.7) and Legato Systems (3.5) followed, IDC said.

Veritas last month reported a fourth-quarter net loss of $US49 million on revenue of $US405 million. However the company said business was better than expected and it reported a $US57 million profit for the year as a whole, compared with a net loss of $US643 million in 2001.

"Over the next year or two, there's going to be a lot of consolidations taking place in the software market," Burton said. "We feel there's going to be a land grab. And because we don't sell hardware, we feel we have the upper hand."