Healthy Rivalry Grows For
Top Virus Hunters
Date: 7/1/98
Author: Lisa Wirthman
The view from Network Associates Inc.
headquarters includes an amusement park ride that
takes thrill seekers 200 feet into the air - and then
drops them straight down.
It's an experience similar to working at the
company, says Gene Hodges, a vice president for
the Santa Clara, Calif.-based maker of security
software. ''We're like a billion-dollar start-up,''
Hodges said. ''It's the fastest-moving company
I've ever worked at.''
Formerly called McAfee Associates Inc., the
company is on an expansion spree in a quest to be
a security powerhouse. It has bought 12
companies in four years - half of them since
October, when it merged with Network General
Corp. and changed its name.
The company's main rival, Symantec Corp., is only
about 10 miles away. But in corporate cultures, the
companies are worlds apart.
Symantec doesn't have an amusement park near
its Cupertino, Calif., offices. But it does have a lot
of noise - the buzz of construction on its new
headquarters across the street. The steel is rising
steadily.
''We don't look for short-term bumps,'' said Chief
Executive Gordon Eubanks. He says he's more
interested in steady growth.
''We have set goals that we think are important,
meaningful (and) obtainable,'' Eubanks said.
Eubanks is a contrast to Network Associates
counterpart Bill Larson. Eubanks is calm and
deliberate when he speaks. Inside Symantec, he
uses the symbol of an arrow to get everyone
pointed in the same direction.
Larson, whose motto is ''Drive fast and take
chances,'' speaks off the cuff. Inside Network
Associates, he has a conference room labeled
''Who's next?''
''It's a giggle with meaning,'' Hodges said.
The two companies are the leading sellers of
anti-virus software, which finds and kills computer
viruses.
In the first quarter, the two sold almost four of
every five units of anti-virus software, says
Reston, Va., market researcher PC Data Inc.
Total U.S. sales of anti-virus software surpassed
$40 million in the first quarter.
But the companies say their paths are diverging.
''We find ourselves strategically at a point where
the guys we used to compete with most
aggressively, like Symantec, are really not the
focus anymore,'' Hodges said.
Network Associates is combining anti-virus
software with the other security software it's
acquired, such as firewalls and encryption
programs. It will incorporate all these into a suite
of products it will sell to businesses. Firewalls
protect corporate networks, while encryption
scrambles data for security reasons.
The move to sell suites to large companies will pit
Network Associates against network management
companies such as Computer Associates
International Inc., which also sells security
software.
Larson says businesses already are a big market
for the company. Retail sales account for less than
5% of revenue, he says. But retail sales are
important for building brand recognition, he says.
He won't abandon that channel to Symantec.
So when Symantec in June said it's licensing IBM
Corp.'s anti- virus technology and patents,
Network Associates responded.
Network Associates a week later said it would
buy Dr. Solomon's Group, the fourth- biggest
maker of virus detection software in the U.S.
''On one hand, (anti-virus) is a smaller piece of the
total Network Associates story,'' said Steve
Frankel, an analyst with Adams, Harkness & Hill
Inc. in Boston. ''On the other hand, Bill Larson is a
tough competitor and he's not going to walk away
from a fight.''
Symantec won't directly compete against Network
Associates' security products such as firewalls and
encryption software, Eubanks says.
''The difference is, we're going to partner with the
firewall vendors, the network management
platforms and broad (encryption software)
infrastructures,'' he said. ''We compete (with
Network Associates) in anti-virus, but more and
more our businesses don't really compete head to
head.''
Network Associates will concentrate more on
firewalls, says Larson. The company is working on
new ''active firewall'' technology that can detect
intrusions into corporate networks and set off
security alerts. (See related story, next page.) The
technology is slated to be included in products next
year.
Symantec, on the other hand, will stick with what it
knows best, says Enrique Salem, vice president of
the security and assistance division. ''We'll look at
how to develop the next generation of anti-virus
products, which are really core to our business.''
Symantec is using research it got from IBM to
create a virus ''immune system'' in the next year,
Salem says.
The company is creating a ''disease control
center'' that connects to corporate networks via
the Internet. Software installed on those networks
will be able to detect viruses it hasn't seen before
and send them back to the control center, Salem
says.
The center would then research the virus and send
back the ''antidote.'' Symantec also will send the
antidote to all its corporate customers as
preventative medicine. ''It's like giving all of our
customers flu shots,'' Salem said.
Symantec extends its products beyond the
anti-virus market with utility software that helps
PCs uninstall programs and recover from crashes.
In this area, it competes most directly with
CyberMedia Inc. and Quarterdeck Corp.
Symantec also is pushing into the corporate arena,
Eubanks says. Sales to large and midsize
businesses account for about half of the
company's revenue, he says.
And analysts say the main value of Symantec's
deal with IBM is the access the company gains to
IBM's large corporate customers.
To broaden its corporate offerings, Symantec in
June bought a product called Ghost from New
Zealand's Binary Research Ltd. for $27.5 million.
The product is a disk cloning utility that helps
companies configure PCs.
Like its deal with IBM, Ghost gives Symantec
entry to corporate accounts, Salem says.
Network Associates, meanwhile, is taking on all
comers in an emerging market that's full of
opportunity, Larson says. ''It's just embryonic,'' he
said.
(C) Copyright 1998 Investors Business Daily, Inc.
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