Why is anti-virus and security leader Symantec buying a niche disk imaging company called PowerQuest for $150 million?
The answer is to do with the one under-performing revenue segment in Symantec’s product line up. Symantec earned $14 billion in fiscal year 2003. In its last reported quarter, which ended in June, revenues were $391 million, up 24 per cent from the equivalent quarter in 2002. The company is rock solid financially with $1.9 billion in cash and short-term investments, up $203 million from the previous quarter. It has grown its year-over-year revenue for 27 straight quarters. But there is a Ghost in this money making machine which is holding the company back.
Symantec’s growth revenue segments are enterprise security (up 25 percent over the same quarter a year ago), consumer products (up 35 per cent) and service revenues (up 160 percent). Enterprise administration revenues though, declined 11 per cent to $49 million. This encompasses the Ghost and pcAnywhere products to backup, restore and distribute PC software and operate PCs remotely respectively.
The products seem moribund. The last newsworthy thing Symantec found to say about Ghost was in April, 2001 when version 7.0 was announced. Two and a half years without a word being said about a product indicates a kiss of product development death.
Symantec’s answer to problems, generally, is to buy companies. It was founded in 1982 and went public in June, 1989. In the next ten years it bought eight companies, including both Intel’s and IBM’s anti-virus businesses. Then the pace quickened and it has been buying companies at a rate of around one a quarter since then. After the June 2003 statement it decided enough was enough and started talking to PowerQuest.
PowerQuest, founded in 1993, has award-winning technology which enables companies to backup PS and server disks fast, to install SW on PCs quickly and easily, to migrate users with their settings to new PCs and, interestingly, to act as a backstop to anti-virus technology by taking incremental backups automatically and restoring a PC’s files to a point in time just before a virus attack. PowerQuest uses virtual volume imaging (V2i) technology and a concept of Active State Management in its V2i Protector products to do this.
Virtual imaging copies a disk’s volume or partition contents as a single container file to another disk. Customers will find this technology is much faster in restoring disks contrasted with the traditional slow file-by-file restore from tape method. PowerQuest’s CTO, Don Kleinschnitz, argues that moving from file-by-file tape restore to file-by-file disk restore is good but doesn’t go far enough; “It’s like upgrading your vehicle from a mini to a BMW, but never shifting the BMW out of second gear.”
By using virtual imaging technology instead of a file-by-file restore, a complete disk’s contents are restored as a single container file at disk-to-disk speed, meaning that files containing user and system settings are restored too. It’s much faster and more convenient with no need after a system crash to re-install the O/S, re-install service packs and all applications, restore the tape backup baseline and finally restore the tape incremental backup sets.
Restoration windows can be huge – and PowerQuest’s disk imaging cuts them to minutes. Symantec’s Ghost product also uses imaging technology. The acquisition removes a Ghost imaging competitor and enables Symantec to obtain PowerQuest’s VolumeManager, PartitionMagic Professional, and ServerMagic, enabling IT staff to add storage, reconfigure the storage they have and manage it. Customers will be better able to manage their disk volume and partition infrastructures as a result.
Paul Winn, PowerQuest President and CEO says, “The combined company will be able to provide customers (with) the solution to build, manage and protect their IT infrastructures.” That’s the big win for customers and for Symantec. It’s to do with storage lifecycle management but not, on the basis of this announcement, with data lifecycle management. It isn’t a hierarchical storage management capability that Symantec has acquired. Neither is it an enterprise storage resource management capability, although it might well grow into that.
By putting V2i protector and the other PowerQuest products in the enterprise administration segment of its line-up, Symantec has a much stronger offering, one which should grow rapidly on the back of disaster recovery-marketing, and so accelerate Symantec’s progress towards becoming a $2 billion dollar corporation. Symantec CEO John Thompson is probably calculating that the PowerQuest acquisition will revitalise Ghost and enable it to grow like the rest of the product line.
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