NEWS Veritas Software announced on Tuesday that it plans to acquire KVS in a move designed to expand its email storage and archiving offerings.
Under the deal, Veritas will pay $225m in cash for the privately held email tools maker. Reading, England-based KVS sells software for storing and managing email, functions that are gaining importance in corporate America, as regulatory changes force businesses to store many kinds of data, including email, and make sure that it can be easily retrieved.
Veritas CEO Gary Bloom said in a statement: "With growing regulatory requirements, customers need solutions that allow them to quickly discover specific information, whether it's in email or personal documents. With the addition of KVS, we can deliver customers the market-leading software for storing, managing, backing up and archiving all their information."
KVS' products archive information that resides within Microsoft Exchange, Outlook, SharePoint and file systems.
The deal is expected to close by the end of September. KVS' 200 employees will operate as a separate unit called Veritas Enterprise Vault.
The KVS buy is important for Veritas; in June of last year, the company unveiled its Veritas Edition for Microsoft Exchange 2000. That technology was designed to provide customers with a one-step means of protecting email from virus problems or data corruption, and for recovering email. The acquisition of KVS will help Veritas expand its efforts.
Ken Kiarash, an analyst at Buckingham Research Associates, said: "This allows them to leapfrog into email retrieve by acquiring the number one leader in the space."
Once the acquisition is complete, Veritas plans to discontinue its Veritas Data Lifecycle Manager 5.0 product, which it had begun marketing in April. "There was significant overlap between KVS and Lifecycle," said Terry Noonan, chief technology officer of Veritas' data management group.
David Rudow, an analyst at Piper Jaffray, said the decision to jettison Lifecycle in favor of KVS is a good one.
"I heard from customers that Lifecycle was an immature product," Rudow said. "Veritas didn't have time to let their product mature when email archiving is so hot. They needed to grab market share."
And because Lifecycle had not yet gained traction in the marketplace, Rudow said, replacing it now with KVS is good timing.
Portions of the Lifecycle technology that do not overlap with KVS will be integrated with other parts of Veritas' business, such as its NetBackup DataCenter, Noonan said.
And over the next 90 days, Veritas will confer with the KVS team to compare notes on where the email archiving market is heading and discuss new product ideas, Noonan said.
According to a study commissioned last year by Veritas, the need for email storage technology is great. Dynamic Markets, which conducted the study, said 46 per cent of chief information officers surveyed would have difficulty retrieving a particular email if it were requested.
And while 92 per cent of those surveyed said they had the ability to retrieve email, only 18 per cent had the ability to retrieve messages older than a year, according to the report.
Dawn Kawamoto writes for CNET News.com
Comments
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1. anonymous
KVS reported revenue for 2003 was $23M and after 4 years they have never made a profit.
Q1: Do they give the stuff away?
Q2: How did Veritas value it at 9x revenue??
A high price to pay for a loss leader?
2. Tony Masters
Never made a profit, but worth $23m? Simple answer - they've bought market share (funded by bucketloads of VC over the years) with an email archiving product that they now market as a 'compliance product'.
There's only a couple of products I can think of that can make a real claim to be 'compliant' (e.g. Zantax, Cryoserver); the KVS solution tied inextricably to Exchange back-up just ain't gonna cut it if you want good quality evidence you can take to court or show to a regulator.
3. anonymous
I agree 100% with previous comment. There's a wide gulf between archiving products and compliance systems, and most of the American email archiving solutions I reviewed for our organisation (except for the one mentioned above, Cryoserver, which I think is European?) breach UK data protection legislation when it comes to properly securing personal data. Would you be happy if your line manager could riffle through your inbox without any kind of audit trail being left? Or IT could make a copy of a plain text database and take it home to read every email at leisure?
And it gets even worse when you look for something that can deliver up emails with any degree of forensic weight behind them.
It's a real problem when organisations mix up 'email archiving' with 'email compliance'; I wish vendors wouldn't try and sell the former as the latter, it'll only end in tears.
Anyway, good luck to the founders of KVS. Always good to see a Brit company sold to an American one!
4. Garry Rhodee
Cryoserver is not a compliant solution either. They claim it complies to rule 17a within the SEC regulations but in fact one of the key requirements is that email with certain highlighted key-words must be quarantined and checked before they are archived. Cryoserver does not have this ability as it duplicates everything upon its immediate arrival.
Anyone who purchases this solution to meet SEC regulations would in fact have to purchase another product to carry this out before the email is indexed.
5. anonymous
'Garry Rhodee' has mis-read SEC 17a if he thinks content-checking/decision methodology is acceptable to SEC. Similarly, 'policy based storage' doesn't cut it either because archiving decisions are made by users or arbitarily.
Organisations need to be careful not to mix up content solutions with forensic compliance approaches; the two are entirely different. And make no mistake: FSA/SEC favour solutions that capture everything, with no option to delete selected records - solutions that allow users to choose just what gets archived are NOT compliant. Cryoserver is the only one that I know of that manages to do this out of the box.
6. Michael Decker
Relax, it'll be a Cryoserver competitor desperately trying to recapture some market share.
He's completely wrong - SEC 17a doesn't say anything like 'one of the key requirements is that email with certain highlighted key-words must be quarantined and checked before they are archived'. Go and have a *proper* look at the legislation at: http://www.law.uc.edu/CCL/34ActRls/rule17a-4.html
The rules are quite clear - keep it *all* (17a-4 b 4) or face severe penalties. DO NOT let your traders, brokers or any other interested party decide the retention policy!