Symantec Execs On The Defensive As Shareholders Push The Security Vendor For Results

Symantec CEO Michael Brown faced tough questions Tuesday at the company's annual stockholders meeting from shareholders asking when they would see the results of the security vendor's aggressive turnaround efforts.

The company had started a turnaround plan under former CEO Steve Bennett, looking to overhaul its go-to-market and product strategies. That turnaround drive began anew 18 months ago, when Brown assumed the CEO role, replacing Bennett -- who was fired.

Since taking over the leadership role, Brown has initiated major changes of his own at the security vendor, most notably the sale of its Veritas storage business to the Carlyle Group for $8 billion. However, some shareholders at the event were less than optimistic about the road to recovery for the soon-to-be standalone security vendor.

[Related: Symantec CEO: Partners Can 'Definitely Expect' Security Acquisitions After Veritas Sale]

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"Given that security is a growing need and an increasing problem with threat attacks, how is it that the business is not growing substantially?" one shareholder asked. "I think there are problems here that I think are not being addressed and I'm not satisfied," he said.

"Over the past one-, two-, five- and 10-year periods, Symantec has substantially underperformed the market," another shareholder said.

Brown fired back, saying that the company is working hard to turn around its enterprise and consumer businesses, and is looking forward to the launch of 12 new products in the coming months to help accelerate that.

"We're in a turnaround here," Brown said. "The reason were not growing is because we've taken time to improve the business."

Brown cited numbers to illustrate how "profitability has improved dramatically," with revenues in enterprise security rising to $2.1 billion in FY15 and to $1.9 billion in the consumer business. Operating margins for the two divisions were 14 percent and 53 percent, respectively.

To continue that upward trajectory in the "second half of the turnaround" after the Veritas sale, Brown said, Symantec will be shifting R&D to perceived growth opportunities, pursuing organic product innovation, moving the consumer Norton business to a subscription-based model and improving go-to-market in enterprise sales.

Symantec declined to comment further for this story.

At least one partner was more optimistic about the company's turnaround and upcoming split than were its investors.

Jason Eberhardt, vice president of strategic alliances at Chicago-based Conventus, said that while investors are champing at the bit to see profits from the company split, partners recognize the turnaround's long-term value.

"From a partner's perspective, ... [Symantec] hasn't given me any reason to not be positive," Eberhardt said.

As the company lands more cash in the bank from the upcoming Veritas sale and increases its focus and investment around security, Eberhardt said, he thinks it will be a natural "domino effect" to profitability for investors.

"By developing the best products and best security portfolio, that helps [partners'] security posturing with clients, and that will bring the profits," Eberhardt said.

"It's definitely going in the right direction," he said.