Just a casual glance at Veritas’ financial statements confirms the problem. While in the decade up to 2001, the company grew at a break-neck pace, stagnation has since set in as Veritas’ core storage management software market has reached saturation point.

Gary Bloom, CEO at the cash-rich Silicon Valley company, has responded to that situation with two acquisitions that ought to help it to simultaneously expand the capabilities of its own technology, while helping it make inroads into fresh,

related markets.

The most significant move came in December 2002 with a $537 million cash and stock deal to acquire Precise Software Solutions, a developer of agent-based technology for monitoring the performance of an organisation’s applications infrastructure, including web servers, application servers, databases and storage systems. Despite the IT spending slowdown, Precise has achieved 20 consecutive quarters of growth. In 2001 revenues doubled to $55.6 million and growth was still running high – at 35% – in the quarter preceding the acquisition. Bloom believes that by exploiting Veritas’ more comprehensive channels to market, Precise’s growth can be cranked up even further.

That move into the wider arena of systems management is strengthened by another Veritas acquisition: Jareva Technologies is to server resource provisioning and management what Veritas’ software is to storage.

The $62 million all-cash deal for the privately held company – which was only founded in March 2000 – will enable Veritas to extend its expertise in storage resource allocation into provisioning for Windows, Linux and Sun-based blade servers.

The thinking is certainly holistic. Veritas envisages its core systems management software picking up a server hardware failure, for example, and passing a re-provisioning request to Jareva’s BladeForce or OpForce software. It would then automatically bring a replacement server or blade online and set it up in the same configuration as the failed one – all without the need for manual intervention. These acquisitions mean that Veritas will compete even more closely against application management software vendors, particularly Candle and BMC Software.

Like Veritas, Cognos is also looking to acquisitions as a means of both consolidating a strong position in its core market and expanding into related areas.

Its $160 million cash deal to buy privately held business analytic applications vendor Adaytum will help it expand beyond its core business intelligence tools into business performance management software. Adaytum’s products enable an organisation’s business analysts to model, build, analyse and measure how well it is conforming to its business plan across multiple variables in near real-time.