Dog eats dog?

June 09, 1998 Sophos Press Release

The inside track on Network Associates' acquisition of Dr Solomon's.

Q. What's really behind this move? Why did Dr Solomon's sell out to Network Associates?

It could be seen in several ways, though after years of fierce and loud criticism of each other's technology and strategy it is hard to fathom at first. On the one hand it's a further admission of a technological gap in Network Associates' portfolio in that it has bought another competing product in an attempt to build credibility. Ailing share prices might suggest a fire sale on Dr Solomon's part (acquisitions are usually followed by staff cuts, office closures and distributors being dropped in a bid to cut overheads). On the other hand, this might simply be an offer that was just too good for the Dr Solomon's MBO team to pass up, given that the alternative was an ever rougher ride on a growth-hungry stock market. It will be many months before any fit or logical synergy in the sell-out becomes apparent.

Q. Why wasn't Sophos the target?

That presupposes that we haven't already been asked! In fact Sophos has rejected take-over offers from several major companies in the last year or two. There are sound reasons why Sophos has continued to guard its independence - all of them customer-driven. Unlike Sophos, publicly quoted companies sometimes place their obligation to shareholders over and above their obligation to customers. In the anti-virus industry, high-security, government and corporate customers demand a highly involved partnership with suppliers. This means reliable long-term commitment from the software manufacturer.

Q. What do you think the likely impact is for Dr Solomon's and Network Associates' customers as a whole?

There will initially be significant market confusion, and worry for Network Associates and Dr Solomon's customers regarding the future of the anti-virus product sets. There are question marks over development plans and stability for both companies' products in the coming 12 months. Some customers will inevitably receive a product that they didn't choose to buy. Ultimately for the anti-virus market the move will mean a reduction of offerings and less choice for the customer.

Q. What sort of questions should anti-virus users be asking?

The type of questions customers should be directing at Network Associates include: If the end game is to be one single merged product, what's the time scale? Is that realistic and will the result be suited to my organisation? How are staff at both organisations reacting, are there any cut-backs planned? Will service be affected as a result? What will happen to the bug fixes and new features that were planned for the products in the coming year?

Q. Acquisitions aren't uncommon in this sector. Are there any parallels?

We don't have to go too far back for an insight into how things might work out. Just two weeks ago Dr Solomon's itself criticised IBM for leaving its anti-virus customers high and dry, following the deal with Symantec. Another example was the takeover of Central Point by Symantec, when product lines were cut irrespective of customer loyalties.

Q. Doesn't Sophos feel threatened by the dominant market position created by this move?

No, in fact the opposite is true. This acquisition represents a great opportunity for Sophos, which is now the largest British and European producer of anti-virus software. Unlike the competition, Sophos doesn't face the same acquisition headaches, such as product uncertainty, uncommitted staff, defocused support and corporate restructuring. The nature of its size, focus and private ownership means that Sophos is easier to deal with and faster on its feet in terms of customer responsiveness and product development.

Customers concerned over the Network Associates/Dr Solomon's acquisition should contact a special Sophos Advice Line on tel: 01235 544088.

Click here to evaluate Sophos Anti-Virus.