It has to be a sad day when you lose your CEO title and the
company stock has its biggest gain since July 2001, 17%. Symantec
replaced Enrique Salem with board chair Steve Bennett on Wednesday. Symantec stock has been dropping steadily
from a 52 week high of $19.81 to a recent low of $13.06. As of 12:50 Eastern Standard on 7/26, $15.40 (post Salem removal).
"While progress
has been made over the last three years in many areas, it was the board's
judgment that it was in the best interests of Symantec to make a change in the CEO,"
said Steve Bennett, chairman, president, and CEO. Bennett had been running the show at Intuit from 2000 to 2007
before joining Symantec several years ago. You can't call the Salem removal a witch hunt. It was time for a change.
Below are some 2012 Q1 revenue figures for Symantec
- GAAP Revenue of
$1.668 billion
- Non-GAAP Operating
Margin of 26.1%
- Non-GAAP Earnings per
Share of $0.43
- GAAP Deferred
Revenue of $3.745 billion
- Cash Flow from
Operations of $340 million
However, the GAAP revenue was up only 1 percent
year-over-year and up 4 percent after adjusting for currency. Income actually dropped, from $191 million to
$172 million
Symantec’s 5-year stock high was in August 2008 at around $22.
Their 5-year low was in October 2008, at
around $11. Note a good year for
them. The fact that the stock is currently
$14 demonstrates how stagnant the company has been over the last several years.
Symantec’s performance in a Gartner Magic Quadrant is mixed.
They’re not in the Leader’s section of Gartner’s Magic Quadrant for
Mobile Data Protection (three competitors are). They’re a Challenger for Secure Web Gateways
(five competitors are in the Leaders portion). They are the Leader for Data Loss Prevention
(with five other companies) and for Endpoint Protection Platforms (with four
other companies). Being in the Leaders
portion of a Gartner Magic Quadrant can be screening criteria for companies. Gartner takes great care in a document
explaining how to interpret a Magic
Quadrant. They state that companies whose
products are in the Challenger,
Visionary or Niche sections of the
quadrant may be the best solution for your needs. Nonetheless, a common sales presentation line
is, “And they’re in the Leaders portion of the Gartner Magic Quadrant for ‘fill
in the blank’”.
In the OPSWAT June” Industry Market Share Analysis Report”,
Symantec is fourth in global market
share, behind Avast, Microsoft, and ESET. Symantec has 10.3% of the market. They are just ahead of AVG Technologies and Avira. In North American, Symantec is second behind Microsoft with 15.1%
of the market.
www.opswat.com
Both McAfee (until their acquisition by Intel a couple of
years ago) and Symantec have been aggressive in making acquisitions in the last decade. Possible reasons - trying to be CA West, expanding product
portfolio, plugging gaps in the portfolio, needing to keep the stock price up, revenue of existing core
products stagnant, “buy” decision winning out over “make” decision. Interestingly enough PGP (a leader in
encryption technology), and currently owned by Symantec, was once owned by
McAfee. Buying for the sake of buying doesn't cut it. Enterprise customers and analysts want some visibility into the rationale and roadmap for these.
Depending on the pundit, Symantec should keep leading
storage management vendor Veritas. Alternatively,
Symantec should sell Veritas. If the
management team hasn’t figured out how to best integrate Veritas
into the product mix after eight years, spin the company off. Sell it another company or see if an equity
firm like Thoma Bravo is interested. Thoma
Bravo purchased Secure Web Gateway/WAN company Blue Coat Systems and recently
sold SonicWall to Dell for about $1.2 billion.
The management team/existing culture may be one that has
lost its mojo. When their streak of
winning VB100 awards was broken a couple of years ago, the
company stopped being tested by Virus Bulletin
www.virusbtn.com
. With testing organization
AV-comparatives, you can’t choose (cherry pick) which tests to participate in
www.av-comparatives.org . So, Symantec is not one of the twenty two
companies included in 2012 AV-Comparatives testing. This doesn’t benefit Symantec’s customers or
their channel partners. Symantec still
participates in AV-test testing and scored 15 out of 18 in March/April
certification testing
www.av-test.com .
Several years ago, a Symantec marketing employee chided companies utilizing the freemium model. He mustn’t have realized that Symantec owns
PC Tools, another freemium company. Unfortunately, PC Tools received only one star
in AV-comparatives’ most recent Retrospective/Proactive Test (July 2012).
Some Thoughts
- More risk taking. Reward
employees and business units who do that.
Make sure that there are employees who know how to and are comfortable doing
this. Bring aboard employees who can do this.
- More cloud. Symantec was slow to the game. Competitor Trend Micro was early. As was Panda. The channel is becoming more comfortable
offering cloud and SaaS based solutions.
- Further embrace VM technology. The fact that Symantec will be at VMWorld in
San Francisco in August and in Barcelona in October are good things. Symantec
currently offers a number of VM
solutions.
- Embrace BYOD - Bring Your Own Device is the acronym du jour. While Symantec offers mobile and tablet
security solutions under both the Norton and Symantec brands, they need to be
more visible in promoting these. BTW – “Protect
your stuff” is an interesting tag line in the Norton line but…
- Pretend you're not one of the 800 pound gorillas. For years, Silicon Valley commuters driving north on 101, would see a Symantec sign as they drove through Santa Clara. If they raised their eyes a little. They'd see that this was virtually next door to McAfee headquarters. A nice friendly competitive poke.
A strategy of placing a huge number of yellow boxes in brick
office supply stores no longer suffices.
Both Symantec and McAfee have come to this conclusion in the
last couple of years. Instead of huge,
the number is still “a lot”. Webroot was using
this strategy for a while at Best Buy when they were the “recommended choice”
of the Geek Squad (unless you asked them off the record!). Their box count is down dramatically.
From a July 25 article in CRN, "The security space is evolving so rapidly that companies that stick with
old ways of doing business are going to lose their relevance," said one
East Coast channel partner on condition of anonymity. "Symantec has
been skating on its reputation for a long time, and that has cost them
big time. Maybe this change will help them get their house in order."
From an irreverent perspective, it may be time for Symantec to tone down
the yellow color. “Men usually perceive
yellow as a very lighthearted, 'childish' color, so it is not recommended to
use yellow when selling prestigious, expensive products to men – nobody will
buy a yellow business suit or a yellow Mercedes.”
http://www.color-wheel-pro.com/color-meaning.html
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