Symantec Hosted Services: Rebranded as Symantec.cloud?
It looks like Symantec CEO Enrique Salem is getting a bit more aggressive about cloud computing. Check the Symantec Web site, and you’ll discover that Symantec Hosted Services have apparently been re-branded as Symantec.cloud services.
That’s an interesting move for numerous reasons. In 2009 and again in 2010, Salem predicted that cloud computing and SaaS would represent only about 15 percent of Symantec’s revenues over the next few years — or about $1 billion in annual revenues toward the middle of this decade. Building a $1 billion cloud company sounds pretty darn impressive. But look at it another way: In some ways, I felt like Salem was only betting 15 percent of Symantec’s dollars on the cloud.
Seeking Wall Street’s Respect
Perhaps that’s changing amid Symantec’s needs to lift profits. Symantec earlier today said Q3 income was $132 million, down from $301 million for Q3 last year. Revenue was $1.604 billion, up from $1.548 billion in last year’s quarter. But here’s the interesting part: Symantec has authorized a $1 billion share repurchase program. Symantec shares have climbed sharply since August 2010, but the shares are essentially flat if you look at January 2010 to January 2011.
Buying back shares could help Symantec to lift earnings-per-share. But it’s clear Symantec also wants to benefit from some of the cloud hype. The Symantec.cloud branding effort should certainly help Symantec’s search engine optimization…
…But is Symantec really ready to tackle cloud computing and recurring revenue models with channel partners? In some ways it’s shocking that…
1. Symantec has hosted the Symantec Partner Engage summit two consecutive years heads-up against the ConnectWise IT Nation conference. More than 1,000 MSPs — many of them focused on cloud computing — attend the ConnectWise event, which wasn’t really on Symantec’s radar.
2. Symantec has major market share in the on-premise storage and security markets, yet Symantec’s brand really isn’t known for cloud security and cloud storage. One early cloud effort, called the Symantec Protection Network, came and went in 2009 or so. The MessageLabs acquisition sounds like it has been successful for end-customers but I don’t hear from channel partners who are thriving with MessageLabs.
3. Symantec Hosted Services seemed successful. But the effort seemed focused mostly on cloud security. Where is the cloud storage play within Symantec Hosted Services? Yes, Symantec has some managed storage services, but it seems like next-generation MSPs have been flocking to dozens of alternative online backup and cloud security companies that offer recurring revenue partner programs.
Another Giant Awakens?
Perhaps most painful of all for Symantec and Salem, cloud-centric stocks rose about 50 percent in 2010, according to the Talkin’ Cloud Stock Index (though cloud stocks have been cooling off lately). Symantec shares, meanwhile, were essentially flat in 2010. In fact, Symantec shares have been flat for five years.
Also of concern: Intel is buying McAfee, which has a very successful SaaS partner program built around the MX Logic buyout. Upstart Kaspersky Lab is planning some cloud security moves, which will likely surface in February 2011. And growing rival Trend Micro is pushing beyond managed security into online backup.
Much like Microsoft’s cloud awakening during Microsoft Worldwide Partner Conference 2010, it seems as if Symantec.cloud signals an awakening at Symantec. Plus, Symantec is finally spending more time with next-generation MSPs. My hunch: Symantec will be bouncing Symantec.cloud messaging off of channel partners for the next few months to see if the term — and the strategy — catch on.