Symantec CEO Steps Down, Security Vendor Lowers Revenue Guidance
The flood of executive departures at Symantec reached all the way to the top levels of the security vendor Thursday with the news that Michael Brown would be stepping down from his position as president and CEO.
Symantec did not provide a reason for Brown's departure, saying only that he would remain with the company as director and CEO until a successor had been found. The company said the board of directors had already begun its search with the assistance of an executive search firm.
Ajei Gopal has joined the Mountain View, Calif.-based company as interim president and chief operating officer. Gopal is a former senior vice president and general manager at Hewlett Packard Enterprise and current operating partner at Silver Lake, which recently took a $500 million strategic investment in Symantec. The company formed a new Office of the President, which includes Gopal, Executive Vice President and CFO Thomas Seifert, and Executive Vice President, General Counsel and Secretary Scott Taylor.
Chairman of the Board of Directors Daniel Schulman said Symantec has executed on its company transformation priorities, making the time right for an executive transition.
"We thank Mike for guiding Symantec through a critical period of transition as president and CEO. … Given our solid financial foundation and clear path forward as the leader in cybersecurity, this is the right time to transition leadership for Symantec’s next chapter of growth. We appreciate Mike’s continued support as the board conducts a thoughtful and comprehensive search for Symantec’s next CEO," Schulman said in a statement.
The Symantec transformation has been drastic over the past three years, trying to turn the company back to growth and position it for relevancy once again in the new security landscape. That transformation has included the sale of its Veritas storage business earlier this year, a new product road map around enterprise security, cost structure improvements, executive leadership additions and returning cash to shareholders.
"I am extremely proud of what our team has accomplished. I look forward to supporting this transition as we continue executing on our unified security strategy, building our enterprise security sales pipeline, improving our cost structure and efficiently allocating capital," Brown said in a statement about his departure.
Symantec also said the company had lowered its revenue guidance for the upcoming quarter to $873 million, down from an expected range of $885 million to $915 million. The company said it now expects non-GAAP operating margins of 25 percent, down from 26 percent to 28 percent, and earnings per share of 22 cents, down from 24 cents to 27 cents.
The company said the revenue drop was due to lower-than-expected license revenue and more deferred revenue than anticipated, due to the company's subscription service business.
"The shift to more ratable revenue is consistent with our unified security strategy, as more customers are buying security offerings that require continuous protection and monitoring to remain up to date and protected against the latest threats," Brown said in a statement about the revenue expectation changes. Earnings are expected to be announced May 12.
Brown's departure is the latest in an executive exodus at Symantec in recent months, particularly around the company's channel team. Most recently, the security vendor lost Americas channel chief Stephen Thomas, who took a role as vice president of sales for North America at Cyberbit Commercial Solutions. Other recent departures include Adrian Jones, executive vice president and general manager of global sales and operations; Tom LaRocca,vice president of global channel programs and sales; and Sean Maxwell, vice president of global sales strategy and field enablement.
Sources with knowledge of the situation have also told CRN layoffs have already started at the security vendor, including in the company's sales organization.
Bob Venero, CEO of Holbrook, N.Y.-based solution provider Future Tech, No. 232 on the CRN 2015 Solution Provider 500, said he hopes Symantec hires a CEO that is more focused on leveraging the channel.
"If they get a leader who is more dedicated, focused and strategic with the channel they will have a lot more success," he said. "You can't get scale in the enterprise world unless you align properly with the channel. If you don't engage the trusted advisers in the channel, you just end up becoming a product company with no enterprise relationships."
Symantec did not provide a timeline for when a new CEO might be appointed.