Veritas to acquire Precise Software for $537M

Hoping to strengthen its hand in the market for storage management software, Veritas Software Corp. said it has reached agreements to acquire Precise Software Solutions Inc. and Jareva Technologies Inc. The deal also allows Veritas to extend its reach into new markets that will send a ripple through the competitive world of systems management, analysts said.

Veritas, in Mountain View, Calif., will buy Precise in a deal valued at US$537 million, Veritas said in a statement. Based in Westwood, Mass., Precise makes application performance management software. Terms of the deal for Jareva were undisclosed.

The Precise deal gives Veritas the systems, database, and application management capabilities that will allow the company to provide end-to-end monitoring of a customer’s IT infrastructure, said Ray Paquet, a vice-president at Gartner Inc. working out of Lowell, Mass.

“They’re moving up the stack. They’ve always been a storage management vendor, but they are now a systems and storage management vendor,” he said.

Veritas can now compete against the larger players in enterprise management software, and the deal represents an opportunity for Veritas to take its expertise in storage virtualization technologies and apply that to a new world of application monitoring, said Arun Taneja, senior analyst at the Enterprise Storage Group Inc. in Milford, Mass.

“Veritas has concluded that storage is not an entity that sits in a vacuum. The application is what’s most important, application performance and availability are what people care about,” he said.

The deal puts Veritas into better competitive position against storage management rivals Sun Microsystems Inc. and EMC Corp., Paquet said.

“These products are difficult to build, and it’s tough to find acquisition partners,” Paquet said.

The deal forces competitors to examine their offerings, and decide whether to follow Veritas’ lead, Taneja said. “Companies like EMC that are doing heavy stuff on the storage side are going to need to determine if they are going to move into server provisioning and application management.”

Also, the addition of application monitoring and server provisioning products to Veritas’ lineup will allow the company to sell more of its flagship storage products into enterprises, Taneja said.

In a separate move, Veritas will acquire Jareva, a supplier of server provisioning technology in Sunnyvale, California, Veritas said. Jareva’s technology is intended to allow companies to automatically deploy additional servers, without manual intervention.

Jareva’s technology also actively monitors systems and applications, as opposed to the passive monitoring that Precise specializes in, Paquet said. This makes Veritas’ offerings more complete, he said.

“We have a history of successful integrations, and we don’t believe this one will be terribly disruptive,” said Gary Bloom, chairman, president and chief executive officer at Veritas, during a conference call following the announcement.

About 5,600 employees currently work at Veritas, Bloom said. The company will absorb about 470 employees from Precise and 35 employees from Jareva, he said.