Symantec announced plans today to split into two separate, publicly traded companies – one focused on security, the other focused on information management (IM).
The decision follows an extensive business review of the company’s strategy and operational structure, and is expected to allow each entity to maximize growth opportunities.
“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,” Symantec CEO Michael A. Brown said in a statement. “It has become clear that winning in both security and information management requires distinct strategies, focused investments and go-to market innovation. Separating Symantec into two, independent publicly traded companies will provide each business the flexibility and focus to drive growth and enhance shareholder value.”
The company expects to complete the spinoff by the end of December 2015.
In particular, the separation among other things will allow each company to focus on growth opportunities and research and development investments as well as increase strategic flexibility.
Garrett Bekker, senior analyst with 451 Research, called the decision “long overdue.”
“The company had become too big to manage, and they were having trouble keeping up with the pace of innovation in many areas of security,” he told SecurityWeek. “The synergies between storage and security never really emerged, in part because in many firms, particularly large enterprises, they are managed by different internal teams.”
“Breaking the company up will also help drive growth, due to the simple math: it’s hard to compare with smaller security vendors growing 30% or more annual when your revenues are nearly $7 billion – you have to generate $700 million in new revenues just to post 10% growth, and security isn’t that big of a market,” he added. “For the most part, security is made up of lots of smaller markets.”
The company’s security business generated $4.2 billion in revenue in fiscal year 2014. According to Symantec, its security strategy has three main elements:
- Deliver a unified security platform that integrates threat information from its products to generate better threat intelligence and integrate that information in a big data platform for enhanced threat analysis.
- Build up its cybersecurity service capabilities across managed security, incident response, threat intelligence and simulation-based training for security professionals.
- Simplify and integrate its security products portfolio by consolidating its Norton products into one offering and extending its advanced threat protection (ATP) and data loss prevention capabilities into more of its products to improve 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 offer by the end of this fiscal year.
Symantec’s information management business meanwhile hit revenues of $2.5 billion in fiscal year 2014. Brown will continue to serve as CEO of Symantec, while John Gannon – who has formerly worked as the COO of Quantum and leader of Hewlett Packard’s commercial PC business – will be general manager of the new information management business.
“Taking this decisive step will enable each business to maximize its potential,” said Brown, who officially took over as CEO last month after being named interim CEO in March. “Both businesses will have substantial operational and financial scale to thrive.”