Is Symantec selling off Veritas business?
- 15 April, 2015 03:03
Symantec has moved to distance itself from reports that the company is being pressured into exploring the sale of its storage storage unit Veritas, for as much as $8 billion.
Growing media reports claim the struggling security vendor has approached NetApp, EMC and several private equity firms to gauge interest in the business. which the company purchased for $13.5 billion a decade ago.
Sources familiar with the matter believe the Veritas business, which has struggled to live up to expectations following sluggish demand for storage and data management products, will be strengthened significantly by the company’s upcoming split, which could make it a more attractive acquisition target for fellow tech giants in the market.
That however has been widely dismissed by Symantec, who maintain plans to continue to split the company into two, independent publicly traded companies: one business focused on security and one business focused on information management.
“We are on track to separate Veritas and Symantec into two independently traded companies by the end of the calendar year,” a Symantec statement read. “One focused on information management and one focused on security.”
Symantec’s decision to pursue a separation follows an extensive business review of the company’s strategy and operational structure.
For the vendor, creating two standalone businesses will allow each entity to “maximise its respective growth opportunities and drive greater shareholder value.”
In January, Symantec announced Veritas Technologies Corporation as the name for its independent publicly traded information management company, alongside a new logo.
“Veritas remains a powerful brand that still has tremendous equity with our customers, partners and employees, and after careful review it was an easy choice as the name for our information management business,” said Michael A. Brown, president and CEO, Symantec, at the time.
“While the name recalls the company’s heritage, the new logo signals that Veritas is ready to solve the most critical information challenges facing our customers today and tomorrow.”
The Veritas business generated $2.5 billion in revenue for Symantec in fiscal year 2014, competing in markets that are an estimated $11 billion today, potentially expanding to $16 billion in 2018 with a CAGR of 7% from 2013 to 2018.
Growing speculation about the company’s future follows a month in which the vendor officially withdrawn its direct enterprise sales team from New Zealand, ultimately placing the company’s solutions in the hands of its partners network.
As reported exclusively by Reseller News, the move has subsequently resulted in significant change for the New Zealand division of the company.
“Effective April 2015, Symantec will withdraw its direct enterprise sales team from New Zealand,” a company spokesperson told Reseller News.
“Symantec will continue to maintain its presence and service the New Zealand market for enterprise solutions through its local distributor and extensive partner network, who offer local knowledge and an ability to scale into regional areas.”