Veritas Software chief executive officer Gary Bloom
talks about compliance, Linux and the challenges of
ILM.
Despite an improving economy and increasing IT budget,
Veritas, like many software companies, had a weak second quarter.
Why?
There are several reasons, and one is the expectation being too
high. As a company, we are on a revenue growth plan - as we stated
earlier this year - of 14%. At this moment, we are well ahead of
that. In fact, for this quarter, we were up 19% and we are actually
up 23% from the first half of last year.
The business condition that created the difficulty was very much
isolated in one segment the US enterprise software marketplace. IT
spending has not increased as much as some people believe.
We expected IT to have a measured recovery, meaning it’s not
skyrocketing like during the [dotcom] bubble and it’s not
depressing as we saw in the downturn. It’s more an average speed of
recovery, but the expectations have gone beyond that.
In our view, Sarbanes-Oxley compliance is diverting management’s
attention and spending. A number of our major accounts must certify
their process and IT systems by the end of this year, making it
difficult for them to implement any new software.
But with the need for data retrieval in the
Sarbanes-Oxley Act there should be higher demand for storage
management software. Are you seeing a loss of momentum in this
sector?
Sarbanes-Oxley represents an opportunity for our business and I
continue to believe that. It’s going to drive demand for storage
and storage software in the long term.
I think that the unexpected short term impact was that companies
complying with Sarbanes-Oxley have stopped buying new software.
It’s like going back to the Y2K era - somewhere around six to
nine months before Y2K, companies stopped changing their systems so
they could ensure continuity when the clock ticked over. This is
really no different.
This timeliness issue has two phases. Companies don’t want to
make changes because, first, the system may not pass compliance and
secondly, they will spend lots of money documenting new software
implementation. That’s why we have not seen Sarbanes-Oxley lead new
demand for software.
Meanwhile, EMC had done well in the second quarter and
met market expectations. Do you think that’s a result of a
successful transition to a software company?
We don’t believe there has been any material shift in our
competitive landscape. Legato, which is an acquired product of EMC,
has always been our competitive product. Interestingly, EMC has
stated publicly that they don’t believe they [affected] Veritas
either.
The area of overlap between EMC and Veritas is roughly $30m
(£16.6m), or one-fifth to one-sixth of our typical quarterly
revenue. Their hardware businesses are actually doing better than
their software business. They are using acquisition successfully to
improve the company to keep it more competitive.
Information lifecycle management (ILM) has been a major
focus for EMC. Do you see Veritas providing the same
offers?
ILM is the generic industry term to manage the processing of
data, like how long you keep that information, where you keep it,
when do you delete it. It’s really not a revolutionary change, but
just a driving demand to manage storage and manage information
better.
The requirements are changing and evolving so quickly and they
are so industry-specific that [every] supplier's products will
require a high degree of customisation.
One of the major challenges with ILM is interoperability
and standards. We often hear users bemoan the slow progress of
establishing standards. Do you think these are fair
comments?
It’s a perfectly reasonable view. If I look at the storage
industry, I’m seeing very few standards. We are big supporters of
standards, given that we build applications for the heterogeneous
environment.
But I can tell you that, when you get into places like EMC, HP,
Network Applications, the more you ask them to build San boxes that
work together, the more likely they are to fight against each
other. So the speed of suppliers in establishing standards is going
to be slow. It’s just human nature.
It’s also one of the reasons why Veritas have done so well - we
provided the technology that allows storage systems to
interoperate, regardless [of whether] there’s a standard or not.
That said, we still prefer to have a standard to make our job
easier.
Veritas is also a major sponsor of Linux, which is quite
popular in China. How do you see the adoption of Veritas’ Linux
offerings in China?
I think China is keener on Linux than other places. They do try
to use Linux in wherever they can, which is not the case in the US
or European markets - partly because China is a developing market,
with lots of investments in technology. It’s a country without much
computing power to begin with, thus they try to adopt the latest
technology.
My view is that Linux is very popular in China on the desktop
marketplace, relative to the enterprise server. In the enterprise
computing space, we still see a [more] traditional enterprise
environment. There are multiple versions of Linux as well - that’s
why we need to establish a development centre in China to convert
and localise the product.
Sheila Lam writes for Computerworld