Much more surprising and dangerous (than Carlyâ€™s firing) to the storage industry is the takeover of Veritas by Symantec.
The largest independent storage software company canâ€™t think of anything better to do for its stockholders than sell itself. Management believes (evidently) that there is nothing they can do to raise their growth rate enough to make it worth it to continue going alone. But Symantec management believes that the growth rate of the combined companies will exceed its current expected growth rate.
Leaving aside the all-too-likely chance that the management teams of both companies are clueless or motivated by payouts they get based on certain outcomes (such as a buyout or a certain growth rate), what does this mean?
Some analysts posit that the personnel savings, primarily in sales and marketing, will justify the sale. That supposes that the both the Veritas and Symantec sales forces are underutilized, or that the cross-selling opportunities are so compelling that big sales cuts will be possible, but neither is likely given the very different markets the two play in.
One of the pay-for-play â€œanalystsâ€ (useful for their role as floaters of trial balloons) was told to opine that mixing security expertise with storage expertise would result in more secure storage, but that is unconvincing. The basic problem with highly secure storage is that systems need low latency access to it, so the opportunity to secure storage through software is fairly limited.
No, Veritas is MBA smart and marketing stupid. Does anyone believe that customers are happy with storage management software today, when 40% of backups fail, data disappears every day, and storage is far from a commodity based on the margins of storage system vendors? This all suggests a massive market opportunity, if only marketing can get their arms around it. But Veritas, despite excellent resources, smart people, great margins and a broad penetration into the F1000, couldnâ€™t figure out what to do to grow their business.
Nor is Symantec likely to provide the missing expertise. Securing corporate PCs against viruses and malware is simply not core expertise for improving storage management.
Looking hard for a silver lining? After they get their money from the sale some smart Veritas people will bail, and start companies with the ideas that Veritasâ€™ management, with classic â€œInnovatorâ€™s Dilemmaâ€ reasoning, couldnâ€™t use to justify a business.