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Symantec's decision to fire Enrique Salem, a move applauded by investors, signals a coming change in the company's strategy that could include a breakup of Symantec along its storage and security lines, according to channel partners and industry analysts.
Symantec Wednesday said Salem stepped down from his position as president and CEO, which he has held for the past three years, and is being replaced by Chairman Steve Bennett, who will add the titles of president and CEO to his list of duties.
The surprising news of Salem's firing came as Symantec reported that for its first fiscal quarter ended June 29 it saw 1 percent year-over-year growth in revenue but a drop in profit of 9.9 percent to $172 million from $191 million one year earlier. The news of the executive change, however, caused investors to push Symantec's share price up more than 13 percent to nearly $15 per share near the end of the trading Wednesday.
Symantec has been struggling with several issues in the past few years, including trying to find a strategy to turn its business model from one that relies on the sale of shrink-wrapped software and software licenses to a Software-as-a-Service model that provides recurring revenue to the company and its channel partners.
With cloud computing and mobility challenges increasing every day, the need to find the right model becomes even more imperative for Symantec.
Symantec remains the top security software vendor with 20.6 percent market share in 2011, which exceeded the combined market share of its three closest competitors, according to research firm Gartner.
However, Symantec never successfully leveraged its 2005 acquisition of storage vendor Veritas, for which it paid about $13 billion, and its share price never approached the high it achieved months before the acquisition was revealed.
Symantec is still the second-largest storage software vendor, but its market share has been slowly slipping over the past few years as EMC and a host of smaller vendors have been growing. Research firm IDC estimated Symantec's share of the 2011 storage software market at 15.8 percent, down from 16.3 percent in 2010.
As a result, many in the industry have been calling for Symantec to clear up its strategy and possibly even divide into more manageable security and storage components, calls that were amplified in the wake of Salem's firing.
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