Of Veritas and Vista
Symantec CEO John Thompson, a veteran of more than three decades in the software industry, has no illusions about the challenges facing his company. He knows that Microsoft is seriously attempting to make third-party antivirus software obsolete by building its own virus and spyware protections into Windows Vista. He knows that IBM, the company where he spent more than 20 years and whose culture of discipline he has brought to Symantec, is making noise in the security market with its recent acquisition of Internet Security Systems. And, he knows that critics in the financial community, his customer base and most of the security industry are convinced that the Veritas deal was a huge mistake, one that could prove to be as crippling to Thompson and Symantec as the HP acquisition of Compaq was to HP's then-CEO Carly Fiorina.

Thompson, a supremely confident man who leaves little to chance, has no patience for such criticism. (See "One-on-One")

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Click here for a sample of Symantec acquisitions since 2003. (PDF).
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"One of the things my team and I get paid to do is to think about where markets are ...

Jon Oltsik, senior analyst with Enterprise Strategy Group, believes the chance Thompson took with the Veritas deal appears to be paying off.

"It's been a big job integrating two $5 billion-plus companies. It's been overwhelming. [Symantec has] taken a lot of heat on this, and the upside has taken a while to emerge," Oltsik says. "Storage, security and data management are headed down the same path, and Symantec has been a pioneer [in this market]. It's all in the enterprise risk management area. There's more upside than downside, and I think you're seeing that now with the EMC and RSA deal."

Gordon Eubanks, Thompson's predecessor as CEO, knows a bit about integrating large acquisitions and pushing a company through often painful transitions. Eubanks says that managing such changes is all about having a clear goal and executing on the moves necessary to achieve it, regardless of outside praise or criticism.

"When the market is leveling, big players get into it and you have to make a change, the key is to pick an area where you can be successful, there's growth and you can be a leader," Eubanks says. "It isn't good enough to say that the market is big and, if I just get 10 percent of it, I'll be OK. That's a losing strategy. It never works because you don't have the scope and the scale. [Symantec] can't just stay where it is. That won't go on forever against Microsoft, and John knows that. He's a very smart, prepared and capable guy."

While customers and analysts like the direction Symantec is headed, there are still a number of challenges ahead for the company. Not the least of these is the looming specter of Microsoft and its OneCare security suite. OneCare is available now as an on-demand service for consumers, and it will be an integral part of Windows Vista. The offering includes both antivirus and antispyware software, placing it squarely in the path of the most lucrative part of Symantec's portfolio.

But it likely will be some time before OneCare makes much of a dent in the market, thanks to the large leads that Symantec, McAfee and others have on the desktop.

"Symantec definitely has a challenge from Microsoft on the desktop, but it's going to be more slow and steady than people think," Oltsik says. "I think Symantec is better off than people think. It's going to take enterprises in particular a long time to upgrade to Vista."

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