News
News
7/27/2005
02:00 PM
Connect Directly
RSS
E-Mail
50%
50%
Repost This

Opinion: Why The Symantec-Veritas Merger Didn't Lead To Other Security Megadeals

Until Symantec can demonstrate synergies between its traditional security business and the storage business it acquired, its stock price will continue to wallow.

When Symantec announced plans to merge with Veritas late last year, it threw a wrinkle into the convergence trend. Until then, the bulk of impending security consolidation was thought to be between security companies or with networking vendors.

But while some thought the Symantec/Veritas deal would usher in more megamergers, so far security challengers have not responded in kind. What deals they have made have largely been done to expand existing product portfolios.

Part of the reason the Trend Micros, McAfees and RSA Securitys of the world haven't rushed to align themselves with an EDS, Cisco or Microsoft has to do with how Symantec's merger has been received on Wall Street; its stock price fell by about one-third in the six months after the deal was announced despite ongoing strong quarterly results.

After initial concern over the lack of apparent synergy between antivirus and storage software vendors, however, analysts have somewhat softened their stance. Since May, six securities firms have upgraded Symantec's stock; in June, Prudential issued a statement saying that while synergy challenges remain, the merger should present "significant commercial opportunities" for the company, namely, an ability to compete more favorably with Microsoft. But until Symantec shows tangible examples of the two technologies coming together--new integrated products aren't expected until well into 2006--its share price may continue to wallow.

That doesn't rule out any other potential megadeals, especially as other vendors decide how best to compete with Microsoft. But for now, most seem content establishing themselves as comprehensive, platform-agnostic security alternatives. However, one vendor to keep an eye on is Trend Micro. The company already has partnered with Cisco, and this spring, CEO Eva Chen told VARBusiness that her company could be acquired if it's in the best interests of shareholders.

Meanwhile, security VARs can only continue doing business as usual. How a merger affects a reseller often depends on whether it is partnering with the buyer or the seller. The lesson, regardless? VARs who partner with likely acquisition targets must remain flexible in this volatile market.

Comment  | 
Print  | 
More Insights
The Agile Archive
The Agile Archive
When it comes to managing data, donít look at backup and archiving systems as burdens and cost centers. A well-designed archive can enhance data protection and restores, ease search and e-discovery efforts, and save money by intelligently moving data from expensive primary storage systems.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Government, May 2014
NIST's cyber-security framework gives critical-infrastructure operators a new tool to assess readiness. But will operators put this voluntary framework to work?
Video
Slideshows
Twitter Feed
Audio Interviews
Archived Audio Interviews
GE is a leader in combining connected devices and advanced analytics in pursuit of practical goals like less downtime, lower operating costs, and higher throughput. At GIO Power & Water, CIO Jim Fowler is part of the team exploring how to apply these techniques to some of the world's essential infrastructure, from power plants to water treatment systems. Join us, and bring your questions, as we talk about what's ahead.