Editor’s note: Symantec’s decision to form two new, more nimble companies will better align to two different markets, writes Jane Wright, engagement manager and senior analyst at Technology Business Research.
HAMPTON, N.H. - Symantec split its resources and portfolio into two yet-unnamed companies: a security company and an information management company. This split is a much-needed move to return Symantec to competitive growth rates in the fast-moving security market while reinvigorating its strategies for the storage market.
In recent quarters, Symantec has been working toward a goal of 30% operating margin in 1Q15, but TBR’s analysis shows Symantec was not on track to meet this goal. Based on Symantec’s structure, prior to the separation announced on Oct. 9, 2014, TBR forecast the vendor’s overall operating margin to be 22.7% in 1Q15. Symantec had to take decisive action to accelerate growth and maintain its competitive strengths in the security market, and TBR believes the company’s separation is a positive step in that direction.
Symantec is primed to move quickly with two more nimble companies
Symantec’s organizational culture was primed for this change. At the end of 2013, Symantec began realigning its people and portfolio into two groups: Unified Information Management (including products such as NetBackup and Storage Foundation) and Unified Information Security (including products such as Symantec Endpoint Protection and Norton offerings). Symantec split its direct sales team into information management and security specialists. Symantec will be able to move quickly along its two new company lines. With these realignments completed, Symantec is prepared to begin engaging with and supporting customers from the two new companies. Customers will find minimal disruptions to their interactions with Symantec as they move forward with new or renewed Symantec deployments.
Symantec’s security company will be a stronger competitor and more sought-after partner
The new Symantec security group will be a stronger competitor in the endpoint security segment and more sought-after partner in the network security segment. Success in the enterprise security market requires a strong network security component — whether from a line of network security products, tight integrations and partnerships with widely installed network vendors or a merger with or acquisition of a network vendor. With Symantec’s resources focused squarely on security, TBR believes the newly separated Symantec security group will be able to attract more important and synergistic partnerships with network and network security vendors. These partnerships will create stronger competitive blocks for other endpoint security vendors that are not able to create similarly strong ecosystems.
The new Symantec information management company will renew its focus on enhancing products such as NetBackup for key growth information management areas, such as software-defined data centers. The dedicated information management team will adjust its go-to-market strategies to attain a stronger competitive position for Symantec’s information management company in the enterprise storage market.