Symbol Begins 2004 With Hope, Relief

No matter when their fiscal years end, every company begins a new year with a sense of hope and expectation. Nowhere, I'll bet, is that more true than at the beleaguered Symbol Technologies, which has a new CEO and a fresh outlook to start 2004.

As you know, Symbol has operated under a cloud ever since it was discovered that former employees essentially manipulated numbers inside the company. That culminated with a guilty plea last March by former sales chief Robert Asti, in which he admitted his role in a channel-stuffing scheme that wound up inflating Symbol's sales by millions of dollars. When the Securities and Exchange Commission caught wind of the scam, it began investigating the company and its business practices. The entire ordeal literally turned Symbol upside down.

How so? In the past year, Symbol has added three new board members, replaced 14 of the 16 senior-most people at the company and completed a thorough review of its financial history dating back several years. At the end of December, Symbol named William Nuti CEO and board member, and filed with the SEC its long-awaited 2002 Annual Report on Form 10-K, which included a restatement of financials for the years 1998 through 2001, as well as the first three quarters of 2002. Previously president and COO, Nuti replaces Richard Bravman, who stepped down from his executive and board positions.

Though he recently told VARBusiness that he personally had made great strides in improving Symbol's reputation, Bravman couldn't escape the fact that he participated in a single transaction in the second quarter of 2001 that was initiated by others at Symbol but which involved the premature recognition of approximately $860,000 in revenue. Ultimately, Bravman could not distance himself from that single act.

Through all of the turmoil, Nuti says Symbol persevered and crafted a winning strategy, one that hinges heavily on partner participation. Today, roughly 40 percent of the company's business flows through partners. By the end of 2004, the company hopes to increase that number to as much as 75 percent.

Accomplishing that will mean convincing many companies to overlook past transgressions and give Symbol the benefit of the doubt. Will they? Some, no doubt, will. That's because Symbol has assembled a compelling product portfolio during the past two years and demonstrated a respectable fiscal performance in that time.

Long known for its bar-code scanners, the company has moved into wireless computational devices used on factory shop floors and in retail stores and warehouses. It also offers wireless Voice over IP (VoIP) phones for voice and data communications. Overall, the company has one of the broadest portfolios of mobile printing, scanning and communications devices for VARs who tailor solutions for customers in retail, manufacturing, government, transportation and logistics, and health-care industries. Furthermore, it has delivered three consecutive quarters of promising results. Above all else, the company has endeavored to restore credibility to its name, a process Nuti likens to changing the tire of a car going 60 miles per hour.

After all that, growing channel sales will seem like child's play. That is, unless, companies like yours reject his value proposition. Nuti, for one, doubts they will outright, though he's not taking VAR loyalty for granted. He believes his company simply has the product portfolio that solution providers need today.

"We're at the crosshairs of three very unique things coming together," he says. "First, we're really at the dawn of a new age where mobile technology is going to play an ever-important [role in] increasing [the] success of business. Second, our core technologies drive real business benefit. Our core technologies today, simply put, can easily create an ROI that justifies their purchase. We drive real employee productivity. We truly create competitive advantage for our customers. We drive operational efficiencies. In many cases, our products help improve our customers' revenue streams.

"Third, the technology, our core assets and the technology we have in the company is maturing from a technology adoption curve point of view. A few years back, you couldn't as successfully scale a large enterprise mobility architecture, which combines mobile computing, Wi-Fi networking and mobility appliances. That was due to the lack of maturity in standards in Wi-Fi and the lack of maturity in standards of performance in mobile computers. Today, you have them. We are in a unique position."

In more ways than one. Let me know if you think Symbol has reformed enough to the point where you'd bet on it.