Symantec Buys VERITAS: Implications for Australia

This IDC flash evaluates Symantec Corporation and VERITAS Software Corporation's decision to merge in an all-stock transaction on December16, 2004 and its effect on the Australian market. Based on Symantec's stock price of US$27.38 at market close on December 15, 2004, the transaction is valued at approximately US$13.5 billion (A$17.8 billion). IDC believes this merger has the potential to enable the combined entities, Symantec and VERITAS, to offer a comprehensive information protection solution. The merger does, however, pose a serious threat to the continuation of the leadership position that each company holds in the security and storage software markets, respectively. The danger is that these very different companies, one a security solutions provider and the other a datacenter protection (primarily storage software) provider, could simply become a collection of disparate functionalities as opposed to integrated solutions. The success of the merger will depend on highly focused research and development (R&D), the retention of core technologists, complete integration of marketing teams, and training of both companies' partners and VERITAS' significant global direct sales force in order to execute on an entirely new go-to-market strategy for both companies.