10 Questions For Symantec CEO Steve Bennett2:00 PM EST Mon. Jan. 28, 2013
Steve Bennett replaced former CEO Enrique Salem in July following quarterly earnings that fell nearly 10 percent. Shortly after taking over the role, he told channel partners and security industry observers to expect changes ahead. The Mountain View, Calif.-based security giant unveiled its Symantec 4.0 strategy this week. The company restructured its senior executive team and announced layoffs of reportedly 1,000 in an effort to boost efficiencies. In an interview with CRN, Bennett said the company is still working out its partner program changes, which will be introduced throughout the year.
I think that mobile has enormous consequences. We're moving on the consumer side where we had one control point, which was the PC. Now you have control points that are going to be your PC, your iPad and cellphone and car. There are so many control points that are expanding. People keep focusing on how to put security on your iOS-hardened device, and the answer is that we're focused on protecting people and information, that's where the puck is going, not protecting devices. The other thing that has happened which is an advantage to Symantec is that people are actually people and employees. They work for big corporations or for small businesses. Our worlds have merged so if we have integrated the company around solving important customer problems, I think we are going to come up with solutions that are far more compelling for consumers or small businesses and for big businesses. Our partners are going to be a very important part in taking that to market.
All the point solutions that we have today we will continue selling. We will invest in making those better and easier for customers relative to what we see as the investment opportunity. Some of them, we will look at how they fit with the strategy, and if they don't fit we'll deal with that. We have nothing to announce on that today. The first thing is to get a strategy and look at all these products and services and see how they fit into that strategy. The 10 offerings are new, higher-value-added integrated offerings, in addition to making our existing solutions better.
I started for $8 an hour at GE in 1977. I started the business called GE Supply, which is the electrical distribution business for GE, so I know a lot about the channel. I spent my first 12 years in the distribution business starting as the city counter man all the way up to being marketing manager for GE Supply, which was a billion-and-a-half-dollar business back then. Then I ran the refrigerator business for GE Appliance, and I ran the Americas business on the industrial side where we dealt with the channel. I have a long history of dealing with the channel and it plays a very strategic and intricate part of the go-to-market strategy for Symantec in multiple ways.
We are going to call on fewer people direct and let the channel take the lead on more customers. I think we are going to focus our business on global accounts and high-end named enterprise accounts, which we are happy to share with our partners. Everything else is going to go through the channel. In my view, over time we will call on less accounts direct and free up more accounts to be handled entirely by partners for both creating and fulfilling demand. I see us going deeper with fewer accounts. That is the strategy and we think it could be a material reduction in the number of customers or named accounts that we actually send Symantec dedicated resources to focus on. We also just announced a renewals organization, but we have no plan and have to figure out how to do it. We will be sharing this with our partners in a clear and transparent way.
We said our marketing and sales as a percentage of revenue were going to go from 41 percent of revenue to 27 percent, which is about the industry norm. You are going to see more use of e-commerce and telesales and in-product marketing. It will be a more effective and more focused direct sales force coverage with more reliance on partners.
We have a lot of partners. I think we have over 50,000 partners. At the end of the day we will be clearer on what we do, what the partners do and then how to effectively split the economics for the value that is created. I did group sessions and one-on-ones with probably a hundred partners in my learning journey, and so I got a lot of good insight. The partners that have partnered with us and have capabilities that add value to the market -- and we do that collaboratively -- we're going to be in a much better situation than what we have today. My guess is that we will have fewer partners with deeper relationships in total with a better economic profile for the people that we view add value to both customers and our go-to-market strategy.
Some said they think we have great assets. Some thought the economics were fine, and some thought they weren't in balance. Some think we are confusing, complicated and hard to do business with, but they want us to get our act together. Their customers have a need and we are the leader in a lot of these areas. They saw the same thing that customers did and employees did -- that our assets are far better than our performance and we have huge opportunities if we can get our act together. We can't get there incrementally; we have to be bold and aggressive both on the offering side and our go-to-market side. A lot of the details on how to do this, we have to figure out.
Our talented employees were frustrated and had poor morale; our shareholders had given up on the company; our partners and customers told me all sorts of things that led me to think that business as usual wouldn't cut it. In my view, the inefficiencies were driven by the fact that we were a company whose strategy was acquisitions. I was on the board and participated in multiple board meetings where it was clear to me and the other board members that the company didn't have a strategy. When you don't have a strategy it's hard to make decisions on a day-to-day basis. I think we were run in a way that was focused on making quarterly financial results. I think it's a big transition for us to go from focused on making quarterly financial results to focused on how we can leverage all the great technologies that we have.
If you look at these 10 new offerings in our strategy, the technologies embedded in some cases combine storage functionality with our security technology in areas like business continuity and mobile workforce productivity. I think that was the theory back then, but then we ran the company as 150 different products. We are going to now focus on doing a better job by both making our existing solutions better as well as developing these new solutions. I think the integration opportunity is still there. If we find that there is something that doesn't fit with that, then we will deal with that appropriately.
I think what we did in the past is all acquisition and no in-home innovation. The focus on organic growth and the commitment to take up R&D as a percentage of revenue means more focus on organic growth complemented by acquisition. Now that we have a strategy, it is easier to decide which acquisitions we should make so we don't make a bunch of one-off acquisitions and run them as separate businesses that don't add value to customers.