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Executive vision: Bloom charts steady course for Veritas

In this continuing series of interviews with the CEOs of major storage companies attending the Merrill Lynch Storage Technology Conference in Santa Barbara, Calif. last week, searchStorage talks to Gary Bloom of Veritas Software Corp.

At the helm for barely two months, former Oracle executive Bloom stresses that he has a plan for maintaining the company's momentum of growth. Outlining expansion in both technology and in geographic territory, Bloom says he plans to turn the Mountain View, Calif.-based Veritas from a $1 billion storage software company to a $5 billion one.

Veritas just topped analysts' estimates for the fourth quarter. When other companies are reporting losses, Veritas is surpassing expectations. Why?
When companies report losses, you have to take a look at the real reason for the loss. Last year, losses were blamed on Year 2000. This year, losses are blamed on an IT slowdown. So, when there's an ineffective sales team or a missed product change?whatever the case may be, there are a lot of reasons companies don?t do well. If you're in an economy that's talking about an IT slowdown, when you report earnings are you going to say you've screwed up or are you going to blame it on a market slowdown? It's a very convenient excuse for people. The reality is, there are a number of companies doing well in this sector, not just Veritas. There's a lot of strength in the market. I think there's a divide coming between the good companies-- the companies that are well positioned and those that are on a cyclical change of technology. They're just shifting. It's all about insulating yourself and riding the wave of market ups and downs. You do not have a background in storage. How do you come into one of the leading storage software companies and takeover?effectively?
While I do have some experience with the industry because I worked closely with Veritas while I was at Oracle, what's helped me a lot is having inherited a really good management team. Also, my situation is unique in that most CEOs are not from outside the company. But, I have a luxury that most inbound CEOs don't. I have the retiring CEO [Mark Leslie] still on staff. While I'm running the company, I can use Mark as a resource. He can see where I'm going and help me get there. How can a company insulate itself and still grow?
We haven't sold all the products that we have. We have more tricks in our bag. We haven't sold everywhere in the world so we're not penetrated worldwide. We have geographic expansion and we're expanding our platforms. We're expanding our own market without a dependence on buying patterns. In other words, Hewlett-Packard or Sun doesn't have to sell a new box for us to get more business. We're expanding what we do well and we're doing it more broadly. It?s like a bulletproof vest. One layer of fabric is our geographic expansion. Another layer is our platforms; another is our technology. If there?s a shift in the market and we get shot in the chest, we?re OK. If there?s a big market turndown and we get shot in the arm?it's going to hurt but we're probably not going to die. We'll survive. What you can't prevent is being hurt by a huge market meltdown?that's like wearing a bulletproof vest but you get shot in the head. It's probably going to kill you. The point being?with a bulletproof vest you're pretty well protected. And, if you get shot in the head it's a severe blow but it'll be the marketplace evaporating beneath you and everyone else. In that case, we won't be the one leading the downhill trend. Can you explain the VOS (Veritas Oracle Sun) initiative?
What do customers do when they buy products? The may buy a server from Sun, storage hardware from EMC, database software from Oracle, applications from PeopleSoft and storage from Veritas. It comes in a big box and the customer is left with having to assemble it all. When it breaks, the customer is left with trying to figure out whom to call. The alternative is to work with something like VOS. Veritas, Sun and Oracle pre-test and pre-certify software configuration. So rather than just shipping the customer a bunch of software and leaving it to them to figure out how to make it work, we pre-test it to work together. Then if it breaks, the customer calls a joint support center that's staffed by engineers from all three companies. We treat it as though it's an integrated software solution. What that means for the customer is that at the end of the day, you get more predictable configuration, and it gives a much higher level of quality and support. This industry is exploding. How do you ride something like this and not get carried away in euphoria? How do you remain steady and strong?
You just have to pay attention to your business really closely. The time to make changes and invest in infrastructure is when business is good. And, the time to focus on expense management and all the controls that make you a mature business is when business is good. All those things are hard to do when business is bad. So, when I look at Veritas--business is good, it's been strong for a long time. There's a lot of opportunity in our business to do better. When we're doing well, we're very focused on who's doing better. And, that positions us very well for turndowns and it always provides us with the ability to respond to a market change. Is that why there continues to be major interoperability limitations among vendors?
That's what the VOS initiative was focused to do. Eliminate some of those interoperability issues. Let's take the guesswork out of the equation for our customers. Let us do the testing. That's why we?ve introduced our interoperability lab. Rather than having our products and another vendor's products meet for the first time at he customer location, we bring the products in-house and test them to make sure they work. That seems so simple and basic. Why haven't other companies picked up on it?
It's a nuts and bolts kind of plan, but don't under estimate the difficulty in putting it together. You're talking three very large vendors with different objectives in the marketplace working together and trying to deliver a joint service. It wouldn?t have happened without working out the big company issues. The VOS initiative is a step toward interoperability, but its still limits customers to three vendors. What if they want to throw in a fourth or fifth vendor to that mix?
We'll go down that path and do similar programs with other vendors. As we come out with our Hewlett-Packard products, there's a strong desire to do pre-testing and pre-certification with them, as well. The whole vision is to eliminate the number of choices. That sounds funny--take away their choice. But what we give them in return is unprecedented reliability. Because if I take away a little bit of their choice, not all of it, just a little, then they have a predictable configuration. You have stressed repeatedly the need for growth. Does that mean acquisitions?
Acquisitions have always been part of the Veritas culture. It was a company built on acquisitions. We will continue down that path. Certainly, there are more opportunities now than last year. Some of the better companies still have valuations that were out of the ballpark and unrealistic to make an acquisition work, but it's an improving situation. But, I don't think we need to make the acquisitions to make that $5 billion to $7 billion mark that I was talking about. Any good company is going to look at acquisition to accelerate the growth.

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