Network Middle East electronic edition 21st February, 2005

Cash-rich Symantec is investing big these days but if it isn’t careful it could be riding for a fall.

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By  Simon Duddy Published  February 20, 2005

Symantec bets big|~|symantec_m.jpg|~||~|Cash-rich Symantec is investing big these days but if it isn’t careful it could be riding for a fall. Following the Veritas acquisition, only Microsoft, Oracle and SAP are bigger players in the software game and Symantec is undoubtedly in a strong position. As the merger opens up synergies between Symantec and Veritas product lines and sales teams salivate at the possibility of cross selling solutions, Symantec’s profits could surge in the coming years. But the dreams inspired by mergers have a habit of turning into nightmares. Just look at HP’s buy-out of Compaq. Pre-buyout Compaq had the number one position in PC sales, now Dell is on top. This suggests that printer-centric HP never really knew what to do with Compaq’s PC business. Furthermore, the fall-out from the HP Compaq merger is still being felt, and arguably played a part in the ousting of former CEO Carly Fiorina. With its big money buy-out of Veritas, could Symantec being heading for similar troubles? The product portfolios of the two companies dovetail extremely well and together they offer end-to-end security and information lifecycle management solutions from those tailored to the consumer, to those suitable for the largest corporate. While this makes sense, the success or failure of mergers often rests on less tangible factors. At board level, both companies have amicably decided to co-operate, saying that the move is in the best interest of both companies. But will that view be echoed throughout both companies? A lot will depend on the morale of employees, especially at the Veritas end. It’s all very well the CEO’s agreeing the broad strategy, but if the rank and file don’t buy-in, then the strategy will founder.||**||

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