On January 28, 2015, Symantec Corporation announced that Veritas Technologies Corporation is the “new” “name for its independent publicly traded information management company, which will be created following the completion of the previously announced separation into two companies.”
Why spend the time to author a research note on this? Apart from the sentimental value of seeing the Veritas name come back, it does represent Symantec’s recognition that its legacy Symantec (security) business and the Veritas business that they acquired in 2005 are not necessarily synergistic.
For the most part, despite folding the Veritas brand into the Symantec brand, many storage users still referred to the information management business as Veritas anyway, so in essence, nothing has really changed.
According to Symantec (or is that Veritas’) press release, the Veritas part of the serves 75% of the Fortune 500 today. Neuralytix is surprised that the market penetration is that low. We had expected a number closer to 90%.
Based on publicly available information, Symantec acquired Veritas for $13.5B in July 2005. At that time, Veritas revenues were slightly under $2B (for the twelve months ending 9/30/2004). In the press releasing announcing the Veritas name in January 2015, Symantec disclosed that the “Veritas business generated $2.5 billion in revenue for Symantec in fiscal year 2014.” This translates to a CAGR of 3% over the last ten years.
Neuralytix believes as a separate company, Veritas will be able to have the focus it needs to improve its growth significantly. The file/object system market is competitive and crowded. However, Veritas’ maturity in this market should give it a dramatic leg up to achieving success. It is our opinion that the market will be very welcoming to the new (and hopefully improved) Veritas.
We wonder if the stock symbol for Veritas to return to VRTS?