Symantec Blames Sales Model Changes For Second-Quarter Revenue Dip

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The company said it was committed to the channel, but the changes will have an impact on solution providers, say industry observers. Symantec is shifting the way it works with channel partners, said Matthew Casey, an analyst at Hampton, N.H.-based Technology Business Research. The company will be more selective in working with partners that can deliver better integrated products in its portfolio to the end client, Casey said.

"They're going to segment their channel program a lot more and interact and engage with the correct channel partner for the specific opportunity," Casey told CRN. "They need to be able to piece together seamlessly because that is what the market demand is requiring."

Casey said McAfee, Trend Micro, Kaspersky Lab and other security vendors are making gains while Symantec retools its go-to-market strategy. Symantec doesn't sell network security gear, but the firm said it would align itself with partners to address customer needs.

"They recognized it as a gap in terms of capabilities," Casey said. "The biggest opportunity for Symantec in the next year requires that they attach their solutions to some of the bleeding-edge vendors."

Symantec said second-quarter revenue fell 3.5 percent to $1.64 billion. It reported on Wednesday that every part of its product portfolio was down in its second quarter. Symantec's user productivity segment, which makes up the company's endpoint security and management business as well as its encryption and mobile security offerings, represented 44 percent of its total revenue but declined 3 percent year-over-year, Symantec said.

The company's information security segment made up of its mail and web security, data loss prevention, authentication services, data center security, hosted security services and managed security services declined 2 percent year-over-year, the company said. It represented 19 percent of total revenue in the second quarter.

Meanwhile, the information management segment, made up of its backup and recovery software, information intelligence, archiving and e-discovery, and information availability business, declined 5 percent year-over-year, according to the company. The segment represented 37 percent of total revenue in the second quarter.

The company had success in international sales, seeing gains in Europe, Middle East and Africa as well as the Asia Pacific and Japan in the second quarter. Symantec said it ended the quarter with cash, cash equivalents and short-term investments of $3.8 billion compared to $4.0 billion, a decrease of 4 percent year-over-year.


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