In the post 9/11 world, virtually every tech company on the planet saw its fortunes tumble. Not security giant Symantec. CEO John Thompson guided a promising up-and-comer with a $5 share price and revenue of $853.6 million into a powerhouse with a $35 share price and a run-rate of $2.6 billion.
One could argue that Thompson's achievements in security rival those of Apple's Steve Jobs in digital entertainment or Microsoft's Steve Ballmer in server software. Then Thompson bought Veritas. The deal shocked Symantec investors and industry partners alike. Steve Groom, director of security and wireless for TIG, a Symantec partner based in San Diego, speaks for a lot of partners when he says, "We didn't lose a lot from a business perspective because we're pretty self-reliant. But we did lose face-time with them."
In an interview with VARBusiness senior executive editor T.C. Doyle, Thompson details his thinking on multiple topics.
VB: Looking back, did it go the way you wanted it to?
Thompson: Well, you can't argue with the financial growth for FY '05--top to bottom it was a solid financial year. It was a terrific year for our strategic position. Now it's about executing--integrating Veritas, making the channel more important, and delivering on the promise of the combined entity.
VB: What have you learned?
Thompson: We made our share of mistakes. We focused too much on the what instead of the why, including customer needs.
VB: Is there any one message that resonates with your customers?
Thompson: Customers want their IT infrastructures to be resilient. They want them to withstand the vagaries that are invariably going to happen, and tie intelligence and insight to real-time information that allow dynamic response to attacks. But they want them to be flexible [enough] to adapt to the business. If we can tie the infrastructure with insight, that would save time, reduce complexity and drive down costs.
VB: Are customers where they need to be in terms of security?
Thompson: No, not at all where they need to be. Security is the No. 1 issue for CIOs. Ask them, and it's No. 1 on their agenda--identity management, policy compliance, the capability to audit systems, etc. More of them have their arms around the issues today. But, with 60 new product vulnerabilities a week, it is challenging.
VB: Is there a movement to consolidate security solutions? Integrate them better?
Thompson: We don't advocate a rip-and-replace strategy. It's important to manage and mitigate risk. It's about policy, audit tools, etc. Most progressive customers focus on policies, which means we're likely to sell services around products.
VB: What about Symantec services?
Thompson: It's small in the relevant scheme of things. Consulting is about risk assessment, policy compliance, etc. But it takes a small cadre of 150 to 200 professionals around the world. The business is doing well--organic growth of 25 percent to 30 percent--and with the acquisitions of Liric and @stake, it's 70 to 80 percent. We expect it to get stronger, but what we have to do is transfer skills to our partners.
VB: Veritas had good partner satisfaction, and Symantec had stellar satisfaction. What happened recently?
Thompson: We learned we can't overcommunicate. There is the opportunity to do a better job of communicating the why and what it means to partners.
VB: Customer segments--where are you doing well, and where are you struggling?
Thompson: The most profitable segment is the midmarket. The enterprise market makes companies better and is very good at extracting a pound of flesh out of vendors, so it is not always the most profitable. At the other end is consumer. There are very few companies that span the entire buying spectrum. The midmarket is where the channel is really critical. If you get it right, you can make a lot of money.
VB: What about acquisitions, and where do you see the company in five years?
Thompson: Eighteen months ago, we couldn't have envisioned Veritas. Five years out, we'd like to be the company of choice to ensure that the systems-infrastructure companies run as sound and as stable as they can possibly be. We'd like to be the leader in infrastructure software.
VB: Cisco: Friend or foe?
Thompson: Yes. Cisco says a lot about security in the midmarket and at the end point. Cisco has a great franchise. I have to watch them very closely.