Symantec splits into security and enterprise business

Symantec has announced a plan to separate the company into two independent publicly-traded companies: one focused on security and the other focused on information management (IM).

“As the security and storage industries continue to change at an accelerating pace, Symantec’s security and IM businesses each face unique market opportunities and challenges. It has become clear that winning in both security and information management requires distinct strategies, focused investments and go-to market innovation,” said Michael Brown, Symantec President and CEO.

The separation will allow each company to:

• Focus on its unique growth opportunities, R&D investments, and go-to-market capabilities
• Reduce operational complexity
• Enhance strategic flexibility, pursue partnerships, and develop independent M&A strategies
• Set distinct capital allocation policies

Brown continued, “Taking this decisive step will enable each business to maximise its potential. Both businesses will have substantial operational and financial scale to thrive.”

Symantec is a trusted brand in security with leading overall market share—twice the nearest competitor—in a market projected to reach US$38 billion in 2018, the company said. Its security strategy has three primary elements:

• Deliver a unified security platform that integrates threat information from its Symantec products and Norton endpoints to generate more intelligence and telemetry, and integrate this threat information in a big data platform for superior threat analysis.
• Grow its cybersecurity service capabilities across managed security, incident response, threat adversary intelligence and simulation-based training for security professionals. This is a growth opportunity as managed security services is projected to be a US$10 billion market by 2018,  growing at a 30% CAGR from 2013 to 2018.
• Simplify and integrate its security products portfolio by consolidating its Norton products to one offering and by extending its advanced threat protection (ATP) and DLP capabilities into more of its products to maximise protection in each of its enterprise access points: endpoint, mail, web and server gateways.

The first offering in this series will be an ATP threat defense gateway that Symantec expects to introduce by the end of this fiscal year.

The security business generated revenue of US$4.2 billion in fiscal year 2014 and will include: consumer and enterprise endpoint security; endpoint management; encryption; mobile; Secure Socket Layer (SSL) certificates; user authentication; mail, web and data centre security; data loss prevention; hosted security; and managed security services.

Symantec’s IM businesses compete in markets that were US$11 billion in 2013, expanding to US$16 billion by 2018. Its IM business serves 75% of the Fortune 500. The company’s appliance products are outpacing the industry with 27% year-over-year growth, while its backup products rank first in the industry. The IM business will allow organisations to harness the power of their information to enable highly informed decision making, no matter what system it resides on.

The information management strategy will focus on:

• Providing resilient, reliable foundational products for its customers’ information management strategy. This will allow the IM business to deliver capabilities to its customers however they want to buy, whether it’s on premise software, integrated appliances or in the cloud. For instance, the recently announced NetBackup 5330 Integrated Appliance doubles the capacity and performance of its appliance family.
• Deliver solutions that dramatically reduce the TCO of storing, managing, and deriving insights and business value from information, and in the process help customers reduce the unmanaged proliferation of redundant and unused data. For example, the IM business will be delivering new integration with cloud providers that enable customers to help manage data across public and private clouds, such as cloud connectors for NetBackup and recovery-as-a-service (RaaS) for Azure Cloud.
• Enable visibility, management, and control across an organisation's entire information landscape through an intelligent information fabric layer that integrates with its portfolio and third-party ecosystems.

Next year, this capability will allow customers to view a map of their information, including personally identifiable information (PII), to reduce the risk that their confidential and sensitive information is compromised.

The IM business generated revenue of US$2.5 billion in fiscal year 2014. The business will include: backup and recovery; archiving; eDiscovery; storage management; and information availability solutions.

Brown will be the President and CEO of Symantec and Thomas Seifert will continue to serve as CFO. John Gannon will be General Manager of the new information management business and Don Rath will be its acting CFO.