Veritas breaks out of storage software

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,


Agilisys performs brain surgery

The management of enterprise resource planning (ERP) software vendor Brain International once held lofty ambitions to do for mid-sized companies what SAP had undertaken at the world’s industrial giants. But those global expansion plans seemed to fizzle out in September 2002 when the company slipped into insolvency. That was despite having recorded revenues of €112.5 million in 2001 and gained a strong position in its home market of Germany.

Its December 2002 acquisition by US-based Agilisys, however, could revive those aspirations. And it is a move that will be greeted with some relief by customers. “This may be one of the few times that an acquisition works for all three parties: users, buyers and the acquired company,” says AMR Research analyst Kevin Prouty.

Agilisys will be an unfamiliar name to many. The company was set-up in 2002 after a venture capital-led buy out of the process manufacturing software business of Systems &Computer Technology.



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.

Recent systems management software acquisitions
Micromuse Network mgmt s/w UK Lumos Technologies Telco network mgmt s/w US $2.7m
NetIQ Systems mgmt s/w US Marshal Software Email filtering s/w NZ $23.0m
Veritas Storage mgmt s/w US Jareva Technologies Resource provisioning s/w US $62.0m
Veritas Storage mgmt s/w US Precise Software Solns Appln mgmt s/w US $537.0m

Other major IT industry deals
Agilisys Mfacturing/lgstcs s/w US Brain AG ERP software Germany n/a
CGI IT services Canada Cognicase IT services Canada n/a
CodaSciSys Financial s/w UK SquareSum Accounting s/w UK £9.5m
Cognos Business intell s/w Canada Adaytum Business perf mgmt s/w US $160.0m
Computer Sciences Corp IT services US DynCorp Defence industry IT services US $950.0m
Epicor Software Business applications US Clarus (Ecomm div) Ecommerce software US $1.0m
IBM Systems s/w &svcs US Rational Software Software development tools US $2.1bn
MetaSolv Telecoms s/w US Orchestream Telecoms s/w UK €12.4m
Northgate Info Solns Applications s/w UK Prolog HR s/w UK €6.9m

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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