10 Reasons Symantec Execs Say The Future Is Bright

Light At End Of Tunnel For Symantec

Symantec executives told Wall Street this week that the company is making progress separating into distinct storage and security businesses. The company moved up its timeline for the separation from December to October. In the company’s fiscal third-quarter results this week, Symantec CEO Michael Brown said a revenue decline in the company’s enterprise and consumer security businesses was largely due to its withdrawal from unprofitable OEM and retail sales models.

Brown said the company’s total amount of business was up 3 percent year over year and that deals more than $300,000 grew 21 percent. Bright spots remain in Symantec's enterprise backup and appliances business. In security, data loss prevention and endpoint protection were key as well. Despite the turmoil around the separation, Brown and Symantec CFO Thomas Seifert laid out 10 reasons why there is a bright future ahead for both its security and data management businesses.

10. Cybersecurity Service Capabilities Growth

In addition to Symantec’s Advanced Threat Protection (ATP) Network managed subscription service, the company has its DeepInsight Threat Intelligence service. Symantec recently launched an Incident Response retainer service in North America and the U.K. It provides on-call emergency response services to provide remote and on-site investigation and support the execution of incident response plans. Symantec also is launching a cybersecurity simulation service to test an organization’s incident response plans and secured a large European government as a customer, Brown said.

9. Symantec Sandbox

Symantec launched its Cynic virtual execution sandbox to inspect suspicious files and detect advanced threats. The sandbox will be used as part of Symantec’s ATP services to correlate suspicious traffic with endpoint and email activity, Brown said.

Symantec also acquired about 65 product engineers and data scientists from Narus, the big data security analytics arm of Boeing. Narus is being shut down, but Boeing retains the intellectual property rights. Narus can process huge amounts of network traffic at high speed and is used by some defense contractors and large Internet service providers. The technology has the ability to view all data that flows over the Internet and has been used by law enforcement to identify and investigate individuals.

8. Advanced Threat Protection Offerings

Brown said the company’s unified security strategy includes the rollout of a global analytics platform and third-party data feeds to secure consumers and enterprises. The ATP services will consist of three modules for network, email and endpoint protection. ATP Network is Symantec’s managed service, which is done in conjunction with Cisco Systems, Check Point Software Technologies and Palo Alto Networks. The service prioritizes alerts for incident responders. ATP Email will ship in June and extends Symantec’s Email Security.cloud to block targeted spearphishing attacks. ATP Endpoint will ship in September and will focus on behavioral analysis of endpoint systems to detect advanced threats. The endpoint is an add-on service to Symantec Endpoint Protection and gives IT pros the ability to blacklist suspicious files and other activity and remove them from infected systems.

7. Data Loss Prevention Growth Tied To Cloud

Symantec acquired data loss prevention specialist Vontu in 2007 and has maintained Vontu’s market-leading position. Symantec rolled out separate cloud products to support Microsoft Office 365 and hosted Exchange implementations as well as a data loss prevention offering to support Amazon Web Services deployments. The company also plans to integrate its data loss prevention software with its ATP services, using the data gleaned from deployments to bolster threat intelligence. Data loss prevention products grew 2 percent year over year.

"Our DLP business continues to grow. We're twice as big as the next competitor there. We've seen that grow in the last couple of quarters and we continue to add some new capabilities to make sure that we have the best DLP capability out there," Brown said.

6. No Network Security Appliances In Future

Brown said the company is still taking a partnering strategy for network visibility rather than rolling out proprietary networking security gear. To support Symantec’s ATP threat intelligence service, Symantec is partnering with Cisco-Sourcefire, Palo Alto Networks and Check Point. "Don't expect us to be delivering a next-generation firewall product. But we are recognizing that adding that telemetry to what we already do in terms of understanding from the other control points like mail, email, like Web, like endpoint, is an important element in understanding the whole," Brown said.

5. Veritas Business Partnering With HP

Symantec has focused on developing offerings around hybrid cloud deployments, which should appeal to midmarket and some enterprises, Brown said. A SaaS-based Information Map service will provide a global view of information across an organization and can be rapidly deployed. It syncs with an organization’s NetBackup implementation, Brown said. The IT Resiliency Platform will be released this summer and will be rolled out jointly with Hewlett-Packard's services organization and its Helion OpenStack cloud platform.

4. Veritas Business Doing Well

Symantec had healthy license growth associated with its Enterprise NetBackup business and its appliance business, Brown said. The company saw double-digit revenue growth in NetBackup software, NetBackup Appliances and Enterprise Vault.cloud, he said.

Veritas is focusing more resources in the backup business toward the enterprise, according to Brown. A recently introduced appliance doubles the capacity and performance over previous models, which should attract enterprise business, Brown said, adding to expect more capacity and performance improvements.

3. Consumer Business Subscription Model To Pay Off

Symantec pulled out of its unprofitable OEM deals and retail arrangements, causing revenue from its Norton line to decline, but executives say the cost savings is significant. Symantec simplified its Norton offerings and is now transitioning its Norton customers to a subscription service rather than an annual license renewal, a strategy that Wall Street analysts like. Symantec is providing a virus-removal guarantee to customers who opt in to auto-renewal, said Brown.

"Every time you present the customer with a renewal opportunity, they have to make a choice, and there's an opportunity for leakage in the business. If someone is a subscriber, then they maintain their subscription until they opt out," Brown said. "It's just a more modern way of protecting consumers. They get better protection, and we think there will be a better business model that results for Norton and Symantec."

2. Internal Efficiencies Improving

Symantec is reinvesting any cost savings from eliminating jobs and streamlining operations into research and development activity, Seifert said. The two separate sales organizations and sales leadership is in place and operating separately, according to Seifert. The coverage models have been defined, he said, including sales compensation and quotas. Symantec has increased the number of quota-carrying salespeople while bringing total sales headcount down.

1. Separation Going Smoothly

Symantec executives said the internal reshuffling associated with breaking up the company is on track. The Veritas and Symantec sales organization will be operating independently as the new fiscal year begins, said Seifert (pictured). The product engineering teams have also been separated, Seifert said. The costs associated with restructuring the company into two separate businesses added up to $68 million. Seifert told Wall Street investors to expect the total to increase over the next six months.

Symantec also is reducing its global footprint and separating its data centers. The additional costs associated with the separation include IT infrastructure improvements and the rollout of a new ERP platform for the Veritas storage business. Seifert said Symantec would be launching the Veritas brand in a phased approach in the next few months. "We're on track to make Veritas operational as a stand-alone company in October," Seifert said.