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Can John Thompson Sell His Vision?

By Sarah Lacy John Thompson, the silver-tongued chief executive of Symantec (SYMC), made a quick 45-minute appearance at Veritas Software's (VRTS) annual developer conference in San Francisco on Apr. 27 to reiterate his defense of the planned merger between the two software giants.

In a morning keynote address, Thompson delivered much the same speech he has given time and again this year. He talked about information integrity -- his buzzword for storing a company's data on a backup drive and making sure it's secure and readily accessible. He drew familiar analogies: Securing data without access is like locking your jewels in a safe and forgetting the combination.

JUST IMAGINE. But much of Thompson's speech centered on the big picture and selling customers and investors on his vision for the combined company. As he emphasizes, this unusual merger of billion-dollar software makers is more about innovation than cost-cutting or the so-called synergies that Wall Street loves. Only by combining companies with seemingly different businesses -- one in security and the other in data storage -- can he provide customers with the technology that makes all that complex stuff work as seamlessly as a spoke and a wheel.

It will take a while to get there, and Thompson's big challenge is convincing investors it's worth the wait. Using the word "imagine" frequently in his speech, he conjured up visions of being able to search backed-up data with a Google-like (GOOG) interface and being able to "rewind" through a year's backups with a TiVo-like (TIVO) interface.

He asked customers to imagine no more weekends and all-nighters backing up data because it will happen automatically -- the way Microsoft (MSFT) Word automatically saves a file. Calling the merger "nothing less than a revolution," he said, "We've only just begun to test the limits of our imagination."

So what is this revolution? For the most part, it's still a big idea. Thompson is talking about products that don't yet exist at a company that has yet to be combined -- and won't be until this summer, at the earliest.

IDEA FACTORY. And he's talking about defying the nature of software innovation. Historically, great ideas come from little companies and are adopted and perfected by the big guys. Take your pick -- the Web browser, the Internet application server -- and it was probably a little pioneering outfit that blazed a path, only to be elbowed aside by a bigger player. Indeed, Oracle (ORCL) CEO Lawrence Ellison pursued rival software maker PeopleSoft for more than 18 months because he figures the industry is maturing, maybe running out of new ideas, and only the big will survive.

Thompson, on the other hand, thinks a bigger Symantec can be a factory for new ideas. It's a vision compelling enough to fire up Veritas' customers. But investors, who've pushed Symantec's stock down more than 40% since the merger was first reported four months ago, are a tougher sell.

During a question-and-answer period, a customer congratulated Thompson on the merger, saying the combined company was great for the industry. To which Thompson said, "Thank you. Would you say that louder so that Wall Street can hear?" (see BW Online, 3/4/05, "Symantec Defends the Veritas Deal").

COUNTDOWN. Thompson also made a few quips at Microsoft's expense. When a customer asked why Symantec was more focused on Windows than other computing platforms he said, "Candidly, the Windows environment is pretty target-rich right now." The audience laughed, and Thompson impishly covered his mouth as if the comment had just slipped out.

But for the most part, his attention appears focused on skeptical investors. "If you aren't wiling to challenge the status quo, how can you ever create a leadership position?" he told BusinessWeek in February.

He's right. But challenging the status quo is scary, too, as Symantec's stock price shows. This deal should close by the end of June. Then, the clock will start ticking for Thompson to turn his grand plan into results. Lacy is a reporter for BusinessWeek Online in Silicon Valley

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