 If
the truth is supposed to set you free, how does one measure
the sudden retirement of Veritas' golden boy CFO Kenneth Lonchar,
2001 recipient of CFO magazine's CFO Excellence Award, for
lying about his Stanford MBA?
Perhaps an unnamed contributor to slamsite F*ed Company summarized
it best: "You NEVER heard of an executive being fired
for lying on his resume when Veritas was over $160 a share,
but now at $11…he lied to get himself the heck out!!!"
Maybe there's some truth to this, or maybe Lonchar is just
the latest victim of the CFO Excellence Award curse, like
past winners Andrew Fastow of Enron (1999) and Scott Sullivan
of WorldCom (1998).
Lonchar's departure is just the latest in a stream of a dozen
executive departures over the past six months, which has led
to rumors of internal financial problems and dramatic troughs
in the company's stock price.
Before Lonchar's headscratcher, Veritas seemed to be in pretty
good shape. Relatively strong sales results and impressive
cash reserves had turned the company into the world's eighth
largest software company. However, in the words of Rodney
Dangerfield, Veritas still "can’t get no respect."
It remains one of the biggest technology companies that people
have never heard of. New CEO Gary Bloom even admits, "I
meet with many chief executives who ask, ‘Who’s
Veritas?’ " Even those who cop to knowing about
Veritas can’t tell you much about it other than that
it is known for backup and restore capabilities.
True to his Oracle roots, Bloom’s quest has been to
make all things bigger and build the company into a $5 billion
behemoth in the growing storage software market. But like
TV's Survivor, Bloom has many competitive cohabitants on this
island (e.g. EMC, CA, IBM, HP, Sun), many of which are brawny
technology natives, gunning specifically for him. CA’s
president and CEO, Sanjay Kumar, calls Veritas a good company,
but says, "We’re going to kick its ass." And
Gartner analyst Nick Allen admits that EMC has the overall
lead in the management market.
Veritas is plagued with critics stating the company has become
just a potpourri of point products added to its portfolio
through acquisition. "It’s becoming more difficult
to produce massive point products…it’s absolutely
critical for Veritas to do because it will be impossible to
double the company if they don’t have a coherent architecture,"
said Arun Taneja, analyst with the Enterprise Storage Group.
Jon William Toigo, an independent consultant and author of
the Holy Grail of Data Storage Management, once a fan of Veritas,
recently awarded them the "Most ICKI Software Award",
an acronym for Incredibly Complex and Kludgy Implementation.
The same criticism is leveled at its partnership strategy,
which in the past has consisted primarily of a series of ad-hoc
alliances around individual products, according to Kris Hagerman,
SVP of strategic operations at Veritas. Finally, Veritas’
pricing structure has been criticized by some customers for
being an EMC-like gauging exercise of overselling a series
of products when only one is needed.
Hope Bloom has a good safety belt, because he's going to be
in for a rocky ride over the next few months.
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