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A Moment of Veritas

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
11/24/2003
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Latin may be a long-dead language, but Veritas lives on – in the storage networking market.

For those unfamiliar with one of the oldest of old-school lingos, veritas is the Latin for "truth" – as in the phrase, in vino veritas, which is what people said 2,700 years ago when they talked about getting hammered.

Today, veritas with a small "v" is hard to find with or without the aid of fermented grape juice, but there's one big-V Veritas that’s easy to spot: Veritas Software Corp. (Nasdaq: VRTS) is at the top of the ratings list in Heavy Reading's Fall 2003 Storage Networking Market Perception Report.

In the survey, 380 buyers and users of storage area network hardware and software rated 135 different vendors on five key market perception criteria: name recognition, price leadership, product performance, product quality and reliability, and service and support. Surveys were taken for ten different SAN product categories: SAN storage systems (Fibre Channel and IP), NAS systems, tape libraries, Fibre Channel switches (fabric and director-class), host bus adapters (Fibre Channel and IP), SAN extension equipment (DWDM/CWDM, Sonet/SDH, and IP), hard disk drives, backup and recovery software, SAN management software, and storage resource management software.

Survey respondents were asked only about vendors in the product categories in which they had decision-making purchasing power or in which they claimed familiarity with products. All responses from SAN vendors were weeded out of the final results. (See the report's Executive Summary for more information about the survey base.)

Of the 15 vendors that offer products in three or more of the surveyed SAN categories, Veritas had the highest overall scores. Veritas's No. 1 ranking is surprising, considering the quality of the competition. The field of vendors includes long-established brands in the storage market (EMC Corp., McData Corp., and Storage Technology Corp. [StorageTek]), as well as 800-pound gorillas with name recognition that extends far outside the storage world (Computer Associates International Inc. (CA), Hewlett-Packard Co., IBM Corp., Lucent Technologies Inc., and Sun Microsystems Inc.). And then, of course, there is the über-gorilla, Cisco Systems Inc.

Veritas trumped them all, including the über-g, in brand recognition among potential buyers. For the three SAN categories in which it sells products, Veritas had an average name recognition score of 74.8 percent. Cisco wasn't far behind, with an average recognition score of 73.4 percent for the five SAN categories in which it plays.

Of course, this isn't exactly a David and Goliath story. Veritas is a $1.5 billion company with a 20-year track record that includes some strange dalliances with another storage industry old-timer, Seagate Technology Inc. (NYSE: STX). But considering their comparative overall statures and marketing resources, Veritas's slim victory over Cisco in name recognition is at least analogous to the Florida Marlins' victory over the New York Yankees in this year's World Series.

Maybe more significant is Veritas's first-place finish in two other market perception categories: product performance and product quality and reliability. Customers see Veritas as a seller of high-quality products. Veritas's margin of victory over Cisco was wider in these two categories, and in fact Cisco placed third in quality and reliability, getting edged out by McData for second place.

Weirdly enough, Cisco graded out first in price leadership among the vendors that have products in three or more SAN categories. And Cisco smoked the competition in service and support leadership, drawing an average leadership perception score of 37.7 percent in that category.

While Veritas soared in the Heavy Reading market perception survey, some other players soured. Prospective buyers apparently don't think much of Sun's SAN product line, for example: Across the board, Sun's ratings were near the bottom of the 15-vendor pack for market leadership. Fujitsu Ltd. (OTC: FJTSY) fared even worse, rating dead last in price leadership and service and support. If there's a marketing plan that can successfully spin the combination of overpriced products with bad support, maybe there's hope for Fujitsu in the SAN market.

As for the rest of the field... well, if you really want to know, you can buy a copy of the report. Just $2,950. Operators are standing by.

How’s that for veritas?

— Dennis Mendyk, Managing Editor, Heavy Reading

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