Symantec CEO Greg Clark said customers are increasingly opting for cloud and subscription-based offerings over traditional appliances thanks to the company's tightly-integrated offerings.
The Mountain View, Calif.-based security vendor said that ratable (or ongoing) business now accounts for more than 80 percent of Symantec's bookings and billings, according to EVP and CFO Nick Noviello. In fact, Noviello said Symantec's ratable business came in five points higher than the company had projected just three months earlier.
"We now expect this ratable mix-shift to continue to a point where traditional license and appliance product sales become the exception in our business," Clark told Wall Street analysts Wednesday.
For instance, Clark said the customers turning to Symantec in the fast-growing PII (personally identifiable information) compliance market are able to choose between an on-premises or a cloud proxy. The cloud proxy offered by Symantec includes multi-factor authentication, Clark said, and can be integrated with a cloud DLP (data loss prevention) module.
"Customers are picking the cloud form factor and the virtual appliance form factor way more often than we thought," Clark said. "Even in the more regulated industries, we're seeing cloud adoption faster than we thought."
Symantec's ability to integrate product sets together in a compelling manner has resulted in ratable software gaining far more traction than the company projected, Clark said. Increased adoption of Symantec's cloud proxy has also made it easier and more cost-effective for customers to adopt additional security from the company, according to Clark.
"You don't have to buy an appliance and deploy it," Clark said. "You don't have to go and do a bunch of work. You can turn it on just like you do with software delivered as a service."
The emerging form factors have also allowed Symantec to make good progress with MSSPs, Clark said. The company announced a deal with Airtel in India that would bring Symantec's product set into the country's top 2,000 customers, according to Clark.
"The ability for us to deliver in cloud does open up easier routes to deployment in new customer segments," Clark said.
Sales in the quarter ended Dec. 29 jumped to $1.21 billion, up 16.1 percent from $1.04 billion a year earlier. On a non-GAAP basis, revenue increased to $1.23 billion, up 13.4 percent from $1.09 billion last year. That fell short of Seeking Alpha's projection of $1.27 billion.