Network Associates is expected to acquire rival antivirus software vendor Dr. Solomon's by the end of next month for more than $US640 million.
Combining the rival antivirus vendors has a "huge, huge potential payoff", said Bill Larson, Network Associates' CEO. Dr. Solomon's is strong in the UK and Europe, while Network Associates is strong in the US and is a leading player in the Australian antivirus market alongside Symantec. Network Associates formed last October with the merger of McAfee and Network General.
The merged company eventually will have software on 60 million desktop computers, Larson predicted. The antivirus market is different from other software markets because it creates its own renewal stream with users upgrading every few years. Even when the market is more saturated, the merged company should see growth of at least 16 to 20 per cent, which is the growth rate of PCs, he said.
"This is a deal we've been trying to do for many years because we thought it made sense to us," Larson said.
Soon after the acquisition is complete, Dr. Solomon's Anti-Virus Toolkit will be available with Network Associates' enterprise security suites, the Total Virus Defense Suite and Net Tools Secure. The bundled security software package offered by the company represents the future for the market, Larson said.
"We won't be talking in a year from now about the antivirus market or the encryption market or the firewall markets," he said, adding that integrated security software packages increasingly will be offered.
Geoff Leary, Dr. Solomon's CEO, had little to say to the media except that he believes the merger opens opportunities for his employees, shareholders and partners.
"The time is right for what we believe is a change in direction, a new era, " he said.