[open mailings]
Wie arrogant ist VERITAS?

[26-10-04 / p57] In der September-Ausgabe des in Paris erscheinenden Storage Newsletters richtete Herausgeber Jean-Jacques Maleval einen offenen Brief an VERITAS. Nach dem Kauf von KVS erinnerte Maleval daran, wie oft VERITAS in der Vergangenheit behauptete hatte, eine komplette Produktpalette zu besitzen. Der KVS-Kauf war insofern mehr als ein offenes Dementi. In der Oktober-Ausgabe des Storage Newsletters antwortet Chris Boorman, Europa-Manager von VERITAS, eher verhalten.

Editorial Privilege

AN EMAIL TO VERITAS

Research firm IDC estimates corporate e-mail volume has increased 29% annually, projecting 7.6 trillion e-mails will hit inboxes this year. We humbly submitted another such email to Veritas Software's attention.

Congratulations! You pulled off the coup of the summer for the storage industry with the acquisition for $225 million the UK-based KVS, the leading email archiving company.

It's impossible not to respect a company such as yours that has long dominated the backup software market and has allowed thousands of companies to protect their data. You are also beyond reproach in terms of your overall management, apart from a few glitches, like this tiny AOL billing problem detected by the SEC, and recent litigation involving shareholders, as is often the case for U.S. companies traded publicly.

It's also hard not to celebrate your winning streak of uninterrupted growth that should allow you, according to statements issued within the company, to attain $2 billion in sales this year. You are fond of affirming that the company is ranked "among the top 10 software companies in the world." CEO Gary Bloom even told us, at the end of 2003, "We're currently number four [among independent software companies], so it's Microsoft, SAP, Oracle, then Veritas." Again, I say: Bravo!

What is less enchanting, however, is a certain attitude that your company gives off, bordering on arrogance. When you are asked if you have software that is capable responding to any given storage problem, the response is always affirmative, and you always manage(continued from page one) to cite a software module in your immense catalog that deals more (or less) with the issue. Why won't you admit, however, that your email archiving offering interested nearly no one, despite the $80-some million that you spent each quarter in R&D, and while you're at it, admit that you were forced to spend another $225 million to finally enter this crucial sector, given how strong demand is? Just as crucial, in fact, as your customer's first steps in ILM (Information Lifecycle Mana-gement). You are obliged to discontinue your own email archiving module, DLM (Data Lifecycle Manager), scarcely a year after launching it, having failed to compete with KVS' Enterprise Vault, Legato/EMC's EmailXtender, Ixos' solution (resold by StorageTek and HDS) or even IBM's CommonStore, not to mention HP's new RISS offering.

Why you can't acknowledge your weaknesses in certain software sectors, something that has pushed you to acquire a total of 15 soft-ware companies in the past six years, only slightly less than those acquired by storage carnivore EMC, now at 18 acquisitions over roughly the same period?

Why not also acknowledge that your NetBackup and Backup Exec software account for the lion's share of your user license fees, much more so than your "pedigreed" storage management and utility computing products? And yet, to hear you describe it, backup is a vulgar, crude "process," while you claim you're only interested in utility computing and the enormous global virtualization concept, whether for storage or servers?

You tell anyone who will listen that by using your software, the custom-er is not limited to a hardware company. And yet, once you set foot at Veritas, it is just as difficult to get out as elsewhere.

You claim to be the world's leading storage software firm. But if we look at the actual figures, rival EMC's revenues are greater than yours for this sector alone. And I can already anticipate your answer to that: EMC, you will insist, is not an independent software company, and its software are directly attached to its hardware. And yet you too sell software on EMC platforms. You should know that in our ranking of the world's storage hardware and software companies, you never placed beyond 12th position for 2003 revenues.

The hardest thing, actually, is not becoming a leading company, but remaining one. Recall that several years ago, EMC's notorious arrogance eventually forced the company to try a far humbler approach with its customers, in order to avoid a massive account flight.

Clearly, the future of storage vendors is not in hardware, but in software-all the analysts agree. And we're inclined to agree also. But the increased efforts of your largest competitors to cherry-pick market share, whether it's EMC, HP, IBM or even Microsoft, will eventually yield gains. And this competition will force you not only to reconsider your attitude, but also to rethink your particularly incoherent catalog, and what's worse, to revise your overly high prices downward.

Free advice: here's an idea for a first step in the right direction... Ask yourselves why you always write the name of your company, VERITAS, in all caps. A little modesty, even in the typesetting, might go a long way...

Sincerely.

Jean-Jacques Maleval

AN ANSWER FROM VERITAS

Veritas Software's EMEA VP of marketing, Chris Boorman responds to an e-mail from the editor of StorageNewsletter, Jean-Jacques Maleval, published in the previous issue of StorageNewsletter.

I read with interest the article in a recent issue of StorageNewsletter by Jean-Jacques Maleval, entitled: An e-mail to Veritas ( SN 9/04).It certainly raised some interesting points to which I would like to respond.

Veritas is a company with a very clear vision - to be the leading provider of independent software to enable utility computing. This vision has only been enabled by our reputation and pedigree in providing 15 years of innovation and class leading solutions, which started with our release of the industry's first robust volume manager and file system. Through the years, we have be-come the acknowledged leader in Windows backup, Unix backup, independent storage software, and now e-mail archiving.

We are very proud of our leadership position, but please be assured that we do not take it for granted. Indeed, as you noted, we have evolved our company over the years from a pure storage management provider into a broader enabler of utility computing, focused on helping IT to deliver an agile environment that provides value to its customers.

We invest very strongly in development and have almost doubled our research and development spend from $175 million in 2000 to an estimated $337 million in 2004. This spend spans all product areas and has allowed us to remain focused on delivering new prod-ucts and enhanced functionality on all the leading open-system platforms.

CommandCentral is just one example of a new family of products developed internally and released recently. These products are focused on defining and measuring SLAs for the business. They represent a logical extension to delivering storage, back-up and availability as a measurable service to the business. These are critical building blocks on the road to enabling utility computing. However, we are not so arrogant as to think that we can do all development ourselves. Sometimes, the most pragmatic path is that of acquisition, and like many companies of our size we have a clearly defined partnering and acquisition strategy.

An acquisition such as that of KVS is indicative of this. KVS is the market-leading provider of e-mail archiving software, and we believe that this solution - combined with the functionality born out of our own DLM development - will further enhance our delivery of value-added solutions to ourcustomers. The vast majority of market analysts and observers openly support this view. Of course, leadership to one person is always arrogance to another. But we humbly continue to work hard, both internally and with our partners, on achieving the vision of utility computing.