Veritas' Bloom gives his take on 2003

Veritas Software is kicking off the New Year with the release of Backup Exec 9.0, a new version of a venerable product in the software maker's lineup.

The retooled Backup Exec helps complete a wide-ranging overhaul of products at Veritas that stretches from its core data back-up and file system products to new areas such as managing Linux clusters and working with IBM Corp.'s AIX operating system. Veritas also made a pair of acquisitions late last year, buying of Precise Software Solutions Ltd. and Jareva Technologies Inc. to help expand its management play further into the data center.

Veritas Chairman, President and Chief Executive Officer Gary Bloom sat down for an interview with Ashlee Vance about where Veritas has been and where it is going.

Q: You have management products for a couple of new areas, like storage resource management (SRM) and Linux clusters running Oracle Corp. databases. Do you see either taking off this year?When we think about the next year and say, "What is going to be an opportunity for Veritas?," some of it is simply executing on, delivering and getting to revenue on a lot of what we have worked on for the last several years. Beyond that, I think there are certainly a handful of IT trends that play into the next year.

I think that CIOs will continue to be focused on getting return on their investments, eliminating complexity and making better use of their resources. That any of this will change whether we have a good economy or a bad economy is, I think, ridiculous. Linux fits in well with the idea that I can do more with less money and yet still get high availability and high performance. So, I do think that will be a trend that has legs this year.

I think you will start seeing ... that more and more of the computing that has traditionally been done on the server will start happening on the network. It's not a trend where you flip on the light switch and it happens overnight, but things will move there.

Q: So Veritas software will sit on top of the switch for management?Yeah, we have a program called Veritas Powered where we are working with over 30 different vendors of network switches and other devices, from the very smallest companies up to Cisco (Systems Inc.). And it's taking our storage assets and putting them into the network fabric such that when you talk about managing your storage you do it from a networking device instead of a server device. We'll see the early signs of that.

Q: A lot of vendors say there is this need for storage resource management tools, but customers aren't clamoring to roll out some of the products offered by you or EMC Corp., Computer Associates (International Inc.) or IBM. What will it take to get sales going for a product like your SAN Point Control management software?Why would a SAN have fast adoption? You are bringing together all of the complexity of the network together with all of the complexities of storage, and we think we are going to make this happen quickly?

What's happening, though, is that companies have run pilots and now they are ready to go full bore, and I think they see the benefits. They have gone through the learning curve.

Q: A lot of your business comes from selling software for Sun's Solaris operating system. With the Windows and Linux crowd gunning for Sun, how concerned are you about a slowdown in your Sun business?We don't need Sun to be selling massive numbers of new boxes in order for us to have a successful Sun business. A lot of our Sun accounts that we have are relatively under-penetrated for Veritas in their environments. We have a large opportunity in the Sun installed base already.

Q: You and BEA Systems Inc. are two third party software vendors that have been closely tied to the fortunes of Sun's Solaris. Are you concerned that Sun and other OS vendors are bundling more management software in their operating systems?Well, they keep doing it, but the one thing BEA does is offer, like us, some platform independence. They don't lead you into 'every application has to be a Sun application.'

The question is does every customer out there want to lock themselves into a single vendor solution. There has been very little technology delivered by these vendors compared to what has been promised and secondly their technology, for the most part, only runs on their platforms.

Q: Any fears that enterprise software will follow hardware along the path toward being commoditized? If we get to a point where it takes no people to run a data center and the hardware is all free, I believe, yes, we will have commoditization in the software business. I think we still have a lot of people to eliminate complexity for and still have a long way to go before software even has to worry about that.

Q: You, Sun, and IBM all made significant acquisitions of software makers at the end of 2002. Is there more to come?My belief in 2003 is that if we begin to see a reasonable level of market stability, you will see continued consolidation in the software industry. I think it is going to be a true year of consolidation.

Q: What does the Precise acquisition give you?>Precise does have some SRM technology in the Windows space that will be an incremental help to our SRM technology, and that's great. The primary product line is application performance management technology. It's heterogeneous in relation to the application, the database and the environment it sits in. We start selling Precise immediately upon close, which we have given as sometime in the second quarter. Our sales force will sell it immediately, and we will work over time to build in interfaces with our other products and get full linkage.

Q: What about Jareva?

That is much more of a technology acquisition that will have lower revenue implications in the near term. They do for servers exactly what we do for storage today. We take all of the storage in your enterprise and put it into a pool and manage it from a single place, so that we use all of that storage very efficiently. They do the exact same thing for servers.

Q: If you add a software provisioning part to Jareva and your other management software, you seem to be talking about something similar to Sun's N1 or HP's utility data center type of technology. All the different forms of grid computing you've heard about today -- and everybody has a different name for it -- all assume that it's all Sun gear, all IBM gear or it's all HP gear.

Q: It seems that Sun, HP and IBM have been pretty vocal about wanting to manage hardware from various vendors. None of them have the scope of the portfolio we have. With Veritas, we offer you the piece parts now that are all heterogeneous. You don't have to gamble on them broadening their portfolio and having heterogeneous support that they don't have today.

Q: You don't seem to think they can pull it off at all or that they even have a goal of being heterogeneous.We have been hearing it the last two to three years, the marketing rhetoric over and over and over about how they are coming after us, but the competitive landscape has not really changed. I am not discounting them. I am not saying there is no chance. I am just tying to put it in a balance. There are a lot of the other companies that we compete against that you have talked about and people are questioning their business model. You will hear that for Sun. Does Sun have a business model than can actually succeed in the future? EMC: Does EMC have a business model that will work in the future? Our business model is not in question.

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