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Merged Symantec takes time out to harmonise licensing

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Veritas and Symantec's sales teams will be kept seperate for at least 12 months following the recently completed merger between the two firms. Harmonising licensing policies between the two firms will only start after this time, giving the new Symantec time to sort out a new pricing structure to replace a model senior execs concedded was far too complicated.

Lindsey Armstrong, SVP of Symantec EMEA, described the merger of the storage and security software specialists as a union based on scope, that brought together firms of similar sizes in different market segments, as opposed to a merger based on scale. In mergers based on scale - which bring together companies of comparable size in the same market (such as Oracle and PeopleSoft) - integration is a priority to maximise returns. The opposite is true in the case of Symantec and Veritas where the priority is not to interrupt established sales operations and revenue streams. "Everybody in the company only knows 50 per cent of the organisation and market," she said.

Armstrong said that both Veritas and Symantec were frequent acquirers and predicted this practice would consider post merger. "The security market is fragmented by both geography and technology and is ripe for future consolidation," she said.

Her comments came during a press conference in London on Wednesday where senior Symantec execs outline the firm's post merger strategy. Symantec and Veritas will continue to sell through their respective channels and there'll be little change in the way the firm comes to market. In addition, Symantec is looking to recruit partners to make more sales in small business and mid-market segments, a particular target for sales growth.

John Poulter, Symantec's VP of northern region EMEA, said that for the first six months post merger the firm would be driving two revenue streams. Between six and 12 months, Symantec will concentrate on building a common user interface and integration within new products. A common licensing scheme will become a priority in around 18 months. "We have a lot of work to do on licensing," he said.

On the technolgy front, Symantec said the merger create the opportunity to put together combined storage and security products - such as technolgy to provide end to end filtering and archiving of email and intergration between intrusion detection and backup facilities. There's little product overlap between the two firms and therefore no need to choose between competing products which to nurture and which to drop. Last week Symantec announced plans to release more frequent updates of its consumer security products (such as Norton Internet Security) which have traditionally been released annually in September during an earnings call.

For the quarter ending July 1, Symantec reported Q1 2006 revenues of $700m 26 per cent up from $557m in the same period last year. Q1 net income hit $199m up from $117m in Q1 2005. ®

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