Veritas 1999 (A): Integrating Sales Forces

By James Lattin, Mark Leslie, Erin Yurday
2003 | Case No. SM120A
In October 1998, VERITAS and Seagate’s Network Storage and Management Group, which both sold data storage management software, agreed to merge. In terms of employee size and revenues, it was nearly a merger of equals. Until regulatory approval for the merger was granted from the government under the Hart-Scott-Rodino (HSR) Act, the two companies could share only public information; hence due diligence was initially limited. The companies received HSR approval on December 4, 1998, and by March 1999 had spent three months really getting to know each other. It had been clear from public information that the two companies offered different products, sold through different channels of distribution, and captured two different customer segments of the market. After all, these differences were regarded as complements and the major justification behind the merger. However, what was not so apparent—until VERITAS got “inside” Seagate after HSR approval—was that the sales force cultures were not at all complementary. Paul Sallaberry, an executive at pre-merger VERITAS, assumed the role of executive vice president of worldwide sales and marketing after the merger. Sallaberry needed to design a sales force integration plan that would take the company to billions of dollars in sales within the next few years without sacrificing any short-term sales momentum. To do so, he had to resolve the issues at hand: culture clashes, disparate compensation structures, overlapping territories, and redundant management positions.
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