Symantec CEO: Sell or Keep Storage, Backup Business?
New Symantec CEO Steve Bennett will perform a three- to four-month review of the security and storage software company. Some pundits are wondering if Symantec (NASDAQ: SYMC) will wind up selling off its storage business, acquired in the 2005 buyout of Veritas Software. What does The VAR Guy think? Hmmm…
Our resident blogger somewhat doubts such a dramatic step is coming. Instead, watch for some classic GE-style re-engineering to emerge.
Always in the security market, Symantec’s storage push started with the $13.5 billion stock buyout of Veritas in 2005. Fast forward to the present, and Symantec’s total market capitalization is only $11.07 billion, according to Yahoo finance — proof that the Symantec-Veritas deal did not create shareholder value.
That deal, orchestrated by former Symantec CEO John Thompson, hit early turbulence. Instead of connecting the dots between storage and security, the deal initially suffered from turf wars and talent overlap. A prime example: Sources say Symantec and Veritas each maintained separate legal teams for quite some time even after the deal was completed.
Progress and Challenges
Enrique Salem, ousted as CEO earlier this week, ended some of those early Symantec-Veritas turf wars. In the channel, products like Backup Exec and Symantec Endpoint Protection have remained very popular with resellers. But under Salem, Symantec also suffered occasional channel setbacks. Even before he became CEO, Salem in 2008 alienated some partners while still serving as COO and speaking to Wall Street about direct sales strategies.
Over the course of Salem’s tenure as CEO, Symantec shares fell about 19 percent, while the Nasdaq Composite Index rose about 77 percent, Reuters reported. So what will new CEO Bennett do to jump-start growth and/or unlock shareholder value?
The potential answer involves Bennett’s former experience at General Electric (GE), where he and other executives frequently re-engineered major business units. During an earnings call yesterday, Bennett said:
“My first order of business will be to speak with our customers, partners and shareholders, and over the next 90 to 120 days I’m going on a tour to listen, learn and work with the leadership team to figure out the right strategy to leverage all of Symantec resources to accelerate our rate of value creation. Once this tour is completed, I’ll share our go-forward strategy to win in the marketplace and how we’re going to drive accelerated revenue and profit growth. This is a process I’ve used before many times in the past. It’s been successful, and I look forward to applying this similar playbook at Symantec.”
So, 90 to 120 days from now will the Symantec playbook include the potential Veritas storage sale? Reuters raised that possibility in brief mention earlier this week.
But let’s not get ahead of ourselves. After all, two of the world’s fastest growing IT markets are cloud storage and cloud security. Can Bennett be the first Symantec CEO to fully connect the dots between storage and security — on premises, in the cloud… and in the channel? Hmmm…