Veritas Software Corp strengthened its push into the Windows NT storage software market yesterday with the purchase of the network and storage management division of Seagate Software Inc. Veritas will issue 33 million shares for Seagate’s NSMG unit, worth approximately $1.6bn at the current share price, giving Seagate’s parent, the storage manufacturer Seagate Technology Inc, a 35% stake in the combined company. The result will be the largest independent storage software company in the world, with 2,300 employees in 16 countries, around 800 of them coming from Seagate. It will also be providing four of the five key storage technologies to be included by Microsoft Corp in Release 5.0 of Windows NT: backup, remote storage, automated system backup and the logical volume manager. (The fifth, removable storage management, comes from Highground Inc). Veritas’ roots come from the high-end Unix-based large systems market, but the company won a joint development deal with Microsoft for NT storage software in 1996 (CI No 2,990) that began its stated aim of moving all of its products over to NT. Seagate has concentrated on backup and management software for NT and Windows ever since it acquired the technology from Palindrome Corp in 1995, and is the market leader for those platforms. One of the reasons behind the merger appears to be a desire to unlock the hidden valuation of Seagate’s software division with the hardware company, which posted a $530m loss for the year. There had been speculation that Seagate Technology would spin-off the division through an IPO (CI No 3,453). The other side of Seagate Software, the enterprise information management division responsible for Crystal Reports and the Holos OLAP tools, remains separate. Total revenues at Seagate Software last year were $293m, with NSMG contributing $173m, EIM $118m, but EIM was the faster growing side of the business. Mark Leslie, the current president and CEO of Veritas will head the combination, which will keep the Veritas name, becoming CEO and chairman, while Terry Cunningham, current president and COO of Seagate Software, takes on the same role at Veritas. รก
