Symantec Exits APM, but Its APM Tools Will Be More Viable

G00154836

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Summary

Symantec's decision to exit the application performance management business is good news for its customers in this market. The new company created to handle its APM tools will, however, face significant challenges.

News Analysis

Event

On 17 January 2008, Symantec announced a definitive agreement to sell its application performance management (APM) business to Vector Capital, a private equity firm based in San Francisco. Vector plans to operate the business as a stand-alone company called Precise Software Solutions. Symantec expects to close the transaction, which is subject to customary closing conditions, in 1Q08.

Analysis

Symantec's departure from the APM market reflects a recognition that APM is not leverageable into the other markets Symantec is in. The company's presence in the APM market came largely from the company's acquisition of Veritas in 2005. Veritas had in turn received this technology through the 2003 acquisition of Precise Software. Precise Software had built strong technology and a sound brand reputation, first in database management (for Oracle, Microsoft SQL Server and IBM DB2 databases) and then in application management (for Oracle and SAP applications). Precise Software's APM solutions offered good potential synergy with Veritas' product and go-to-market strategies, but their potential was not realized prior to the Symantec acquisition of Veritas and they proved to be a poor fit with Symantec's security focus, which led to a steady decline in market presence and visibility.

The spinoff of Symantec's APM business will likely extend the viability of this technology, and current Symantec APM customers should consider the sale a positive development. However, the new company will face challenges in rebuilding Precise Software's brand reputation and in establishing itself as a competitive force in the APM market. Current and prospective customers should expect an increase in sales and marketing efforts from the new company, which will have dedicated sales and marketing teams for this product.

Recommendations

  • Enterprises using Symantec APM tools: Take this opportunity to demand a product road map from Precise Software Solutions and to renegotiate transition contracts to obtain better pricing and support guarantees.

  • Enterprises seeking APM tools: Do not exclude Precise Software Solutions from evaluation shortlists on the basis of this announcement.

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