Q&A: Symantec's Enrique Salem On The Shift To Services

Channelweb.com Security Editor Stefanie Hoffman sat down with Symantec CEO Enrique Salem during the company's Vision 2010 Conference in Las Vegas, to discuss the company's recent decision to hand over significant portions of its consulting business to its partners, as well as its integration strategy and the future of its cloud services. The following are edited excerpts.

Congratulations, you've been here a year. What would you say some of the highlights have been over the last 12 months?

First of all, I think we've made huge progress on the product side in integration and quality of products. And second, I'm really pleased with the improvements we've seen in what we call the net promoter scores. So very pleased with the enthusiasm of our partner community. So better product quality and better quality integration and partner reception. And next year's going to be even better.

How so?

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I think that our portfolio has gotten to a point where people understand, instead of having lots of security products, Francis (DeSouza) laid out a strategy for four suites. Instead of having to worry about selling backup and archiving and having them be separate, it's now integrated. Deduplication is integrated. And so, I think it's easier for our customers and easier for our partners. Awesome.

As partners take over some of Symantec's consulting business, there will likely be structural shifts. Will these shifts result in layoffs in some of Symantec's consulting services divisions?

What I'm trying to do is get our partners more involved in everything we do. And I think we're succeeding. When you look at our business, you're always trying to allocate resources to what you want the business to look like. And so, and this is no new news, we're having more of our work being done by partners. We're having more of our work being done in geographies outside of the United States. And so every year, every quarter, there's always some amount of restructuring, but it is nothing that I would tell you is meaningful.

What do you consider meaningful?

If you think of a company of 17,500 people, 100 people changes, 200 people changes -- every change is important. But I would tell you, It's relatively small in the bigger scheme of Symantec. I don't think a quarter goes by, if you actually look at our restructuring charges, that we don't have some form of restructuring. When I moved we had multiple offices all over the United States. We're trying to drive to fewer offices. And some people decide, hey, I want to live in one location versus another. We try to get people to relocate, sometimes they decide they don't want to. If you look at our financials, you'll see that pretty much every quarter, we've had some form of restructuring.

Next: Creating Opportunities For Partners So, this isn't a massive layoff?

No. I think what I care about is that we have competitors. What we want is that partners see that there's more opportunity to work with Symantec than with anybody else. And that's what we're really trying to get to. Because the issue is, we think we've got great products. We've got loyal partners who are well trained. I think we're going to do great.

So the Sell With Program was the launch of this. And this next phase is a continuation of Sell With. But Sell With had some problems. What was wrong with Sell With?

When you look at Sell With, Sell With was a program that was targeted at one segment. The partners would have liked us to do all segments simultaneously.

What segment?

Enterprise. So the way we segment is 1 to 5,000, and then 5,000 and up. And we started in 1 to 5,000 and what the partners were saying is, "We'd like to do that everywhere." And what we said was "Let's prove that it works." And if you look at it, what I track is how many new deals are coming in, and deal volumes are up, independent of the new change, of the new extension of the program. We saw deal volumes increasing in the segment where we were doing Sell With. It seems like it's working. Let's continue to extend it.

Several partners I spoke with said that there were some territorial issues initially in the Sell With program. Do you feel like this latest implementation of the Sell With program will help reduce some of that confusion?

Absolutely. There's very little that's difficult to understand. Let's take a step back. The goal right now is having specialized partners that can help take our products and services, and create solutions in the marketplace. There's not a lot more we can do to simplify it. Now they got to go and be great. Here's one thing partners need to know -- we're going to track their success with customers. So now people really want to be associated with our program, because it's a great program. And we want to make sure that -- let's say that you go to sell to a customer and they buy a product -- we're going to measure that. And partners who do a great job will get more business from us. And that's what you want. You want them to really feel like they have incentives, they're highly motivated for a customer's success, and we're going to track it. And if they do a great job, they'll get a lot more business.

Is this shift in consulting services delivery an admission on Symantec's part that it couldn't expand its consulting services business?

We can do anything we want, Stef. I mean seriously, when you have two billion dollars and you have a (big) profit margin, we could go deeper into services.

Next: Building Hosted Services Even big companies make mistakes.

We never make mistakes. (laughs) No, but think about it. You see companies like Xerox, Dell buy services companies. We could have done that. I mean, if you think about our multiples as a software company, we have a higher multiple than any services company. It's actually easier for us to go out and buy a services company because their multiples are lower. But what we chose was to go the other direction.

Instead of trying to continue to scale up services, let's leverage partners more because what we felt, and I think we'll be proven right, is if partners believe they can make more money working with us, that will drive more product sales. That's the theory. I think we'll be right, but the goal would be, if a partner feels like they're going to be more successful with us than another vendor, they'll invest more in training and enablement with us, and take our products to market, they'll work with our field (staff) and ... I'm encouraged. I have to say. I've done this for a while and, in general, partner enthusiasm is as high as I've ever seen it.

So looking ahead, does that mean that Symantec is going to hand over more hosted services to its partners or will that basically still be in Symantec's court?

I want our partners to get trained an enabled on how to take the hosted services to market. There's a 100,000 small- and medium-sized businesses; we need our partners to reach them. So we need to enable the partner community. It's not about us anymore. They're ready to participate and we're ready to start enabling them. So the message is, if they've got the right expertise to deliver hosted services, we want them in the program. But there are new things that they're going to have to learn. Not just about our technologies but about how do you deliver hosted services.

When do you see that taking place?

Now. They're enabled. But it's right now though. We have a program to enable people on our software as a service. To be clear though, some partners are building, using our technologies, for some of their own hosted services, which is great. So we can enable them to take our hosted services to market, and that's today. We're going to host the services just because it's more efficient than having all these point products everywhere.

And I think customers are going to want that. They'd rather not have a local small company that may not have the infrastructure to deliver on the security and the availability. Because those are the two big concerns in software as a service, security of the data and is it going to be up and running? I have to say, having worked with partners for a long time, I am pleased with where we are. I always worry, are we kind of drinking our own Kool Aid thinking it's going to be better than it is? But right now I'm encouraged.

What percentage of your partners would you say are ready to make that move into hosted services?

We've had several thousand in the last 90 days. I don't know what percentage of our total partner base, because we've had a lot of partners, but I thought on the earnings call I said there was 1,400 or 1,500 that were enabled in the last 90 days. So they're excited. This was not this March quarter but the December quarter. So good progress.