Symantec's APM Leaves Quietly

When Veritas bought Precise Software Solutions for $609 million ($400 million of that in cash) in June 2003, execs felt the addition of the Israeli firm's application performance management (APM) software would speed up data access for Veritas's storage tools.

That apparently didn't pan out as planned. Five years later, as Symantec continues to face questions about the value gleaned from its $13.5 billion acquisition of Veritas in 2005, Symantec has decided to sell the Precise Software assets to San Francisco private equity firm Vector Capital.

Symantec refuses to divulge any financial details of the pending transaction, which is expected to close by the end of this calendar quarter. Execs also wouldn't specify how much revenue Symantec gleaned from APM products. Vector Capital reportedly will refinance Precise Software Solutions as a standalone company. Again, estimates on the level of Vector's spending aren't being released.

Symantec execs approached interviews yesterday with self-congratulations. "We've had a very positive response from various analysts," said Jeff Reed, Symantec's VP of strategic operations. Symantec had come to view APM products as a distraction to the company's server and storage management efforts. Further, the sale to Vector precluded any chance that a competitor might grab the Precise Software assets -- at least for awhile.

Symantec execs refused to comment on whether Vector has any contractual arrangement to retain ownership of Precise for a specified timeframe.Symantec intends to forge ahead with three core storage and server business areas: backup and recovery (including the NetBackup and Backup Exec products); storage management (including Storage Foundation and CommandCentral); and server management (including Veritas Cluster Server and Server Foundation).

At least one analyst found the announcement interesting. "If nothing else, it confirms what we all thought at the time; application performance management really didn't fit well with Veritas's portfolio, and the takeover by Symantec didn't make much difference either," writes Simon Robinson of The 451 Group in an email. "But clearly there is still value in the business itself; let's hope the PE firm can get more results out of it than Symantec could."

Precise Software had apparently retained some independent identity within Symantec. The company's R&D facilities continued to operate with about 200 people in Israel, where rumors of the planned spinoff appeared in media outlets this past October. There are also another 100 or so employees located elsewhere, and they'll continue to support APM customers for one to two months following the close of the deal. Vector will be working with Symantec to sort out separate office arrangements post-closing.

Vector Capital is a 10-year-old firm that invests in a variety of public and private technology companies, including Corel, Landesk Software, and WinZip.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.