PC Defender Symantec Shifts Over To Offense In Play For
Corporations
4financial.4anything.com
Anti-virus software makers are specialists in
defense. But Symantec Corp. is bucking that trend
and going on the offensive.
The creator of such computer security successes
as Norton AntiVirus and Norton Internet Security,
Symantec is champing at the bit for corporate
sales. Why? The corporate computer security
market should grow 30% a year, nearly triple the
consumer market, analysts say.
So Symantec’s treading into the territory of
Network Associates Inc. of Santa Clara, Calif.
Most of Network Associates’ $684 million in
annual sales comes from protecting companies,
analysts say.
Image: Company In The News
“Clearly the opportunity for us is to expand our
product base in the enterprise security space,”
Symantec Chief Executive John Thompson said.
Symantec’s revenue amounted to $705 million in
fiscal 2000, up 33% from 1999. Symantec’s blend
is 50% consumer and 50% corporate sales.
Thompson wants a 55% corporate to 45%
consumer mix by March.
Trouble is, Wall Street seems tentative about the
company of late. Symantec’s stock price more
than doubled from mid-1999 to mid-2000. But a
June swoon brought it down from above 71 to the
mid-50s. Analysts cite industrywide weakness in
consumer sales in April and May. The stock got a
slight boost when first-quarter earnings were
reported July 19, but has been choppy since.
And Network Associates has refocused from
suites to individual products for encryption,
intrusion detection, anti-virus and help desks. It’s
also regaining sales traction.
“Symantec will not be able to win the easy deals
that perhaps it was getting when Network
Associates was going through its transition,” said
analyst Kevin Wagner of Boston-based investment
bank Adams, Harkness & Hill Inc.
Spearheading Symantec’s business move is
Thompson, who arrived a year ago after 28 years
as an IBM Corp. manager. Thompson has pared
down Symantec to fighting trim. He divested
unrelated ACT and Visual Cafe product lines,
forged new alliances and acquired new security
software, Wagner says.
“Don’t forget last year, when Network Associates
stumbled and posted a $25 million quarter when
everyone was expecting $225 million,” Wagner
said. “Here comes John aboard, he strikes up an
IBM partnership and starts pushing the corporate
product at a time when Network Associates was
on its back - and he made some headway.”
Consumer sales are somewhat weak, but
corporate growth has come back after a lackluster
quarter, Wagner says.
Thompson could hardly have come to a computer
security company at a better time. Hackers hit
major Internet sites in February. The market
swooned and security stocks spiked.
In May, the “Love Bug” virus swamped e-mail
systems worldwide. Businesses are asking for
stronger inoculations against computer bugs.
And Symantec seems to have recognized new
market demands.
Take Norton Internet Security. The online
gatekeeper arrived in December and quickly took
74% of the market. The software protects
computers from hackers, privacy intrusions and
viruses.
“(It went) from being a thought . . . to being a
market leader in 90 days,” Thompson says. Norton
Internet Security 2000 ranked sixth among
business titles in June sales, says PCData Inc. of
Reston, Va.
Symantec is expanding its ability to work with
different corporate platforms, such as newly
popular Linux and the old standby Unix. Until
March, it concentrated on working with the
Windows NT platform, though many businesses
still use Unix, says John Puricelli, analyst at A. G.
Edwards & Sons.
In May, Symantec announced an anti-virus deal to
protect users of Yahoo e-mail. It’s not much of a
revenue producer, but it has promise, Puricelli
says.
“(It) shows the software can scale and scan
millions of messages a day,” Puricelli said. |
