Symantec Replaces CEO; Sharpens Cloud Computing, Mobile Focus
Symantec CEO Enrique Salem (l.) has stepped down. Chairman Steve Bennett (r.) succeeds him, stating that Symantec (NASDAQ: SYMC) has been “underperforming” amid the shift to cloud computing and mobile computing (smartphones and tablets, one would logically conclude). Competition from rival security software companies like Kaspersky Lab, McAfee, Sophos and Trend Micro may have also pressured Symantec, which is changing CEOs only a few months after changing channel chiefs. Here’s the update.
In a prepared statement, new CEO Steve Bennett said:
“Enrique Salem has been a significant contributor during his 19 years’ associated with Symantec, including the last three years as CEO. While progress has been made over the last three years in many areas, it was the board’s judgment that it was in the best interests of Symantec to make a change in the CEO.”
“My view is that Symantec’s assets are strong and yet the company is underperforming against the opportunity. I’m looking forward to working with the team to build upon the significant assets in place to help Symantec accelerate value creation for all of its stakeholders.”
Symantec said the CEO change is not based on any particular event or impropriety — eliminating any potential speculation about alleged ethical or moral lapses. (Each time a CEO leaves a company these days, some pundits wonder if there were improprieties that resemble recent setbacks at Best Buy or the 2010 CEO shakeup at HP.)
For its Q1 2013, announced today, revenue rose 1 percent to $1.668 billion. Bennett said the company’s investments in cloud security and mobility continue to gain momentum, but he wants to “further accelerate the company’s value to employees, customers, partners and shareholders.”
Symantec Business Challenges
Still, The VAR Guy has a few hunches about why Symantec made the CEO change. They include:
1. Competition: Upstart rivals like Sophos and Kaspersky Lab have been in high-growth mode. Sophos is connecting the dots between unified threat management and endpoint security, offering a pure channel strategy along the way. Kaspersky Lab, meanwhile, has built a powerhouse channel leadership team (Nancy Reynolds, Chris Doggett, Jean Lozano, among others) and is marching toward $1 billion in revenues in 2014. Meanwhile, McAfee and Trend Micro have continued to make channel moves. (McAfee launched a formalized MSP partner program today.)
2. Cloud Computing: Symantec was somewhat slow to catch the cloud computing wave. Salem back in 2009 predicted that cloud services and SaaS would gradually represent 15 percent of Symantec’s revenues. That’s a healthy $1 billion, he said at the time. But the real cloud shift didn’t arrive until around 2011, when Symantec rebranded its online services as Symantec.cloud.
3. Partner Strategy: Symantec’s channel partner program has showed momentum in recent years, but Salem back in 2008 alienated some channel partners when he made direct sales statements to Wall Street. Channel Chief Julie Parrish was left in a difficult position amid the CEO statements, and she soon exited for NetApp. Symantec Channel Chief Randy Cochran provided stability but he exited the company earlier this year, shifting the Channel Chief spot to John Eldh, a cloud veteran who understands recurring revenue opportunities for partners.
4. Mobile: Ultimately, Symantec’s CEO change could be about shifting industry platforms. Symantec’s bread-and-butter business involves protecting PCs and servers. But growth in those markets has slowed, and competition has intensified. Meanwhile, smartphone and tablet sales are skyrocketing — and mobile device management (MDM) vendors are the big winners (so far) in those markets.
The VAR Guy will be back soon with more analysis of the Symantec CEO change.