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Symantec Corporation (SYMC), known by many as the producer of the Norton anti-virus program, specializes in providing information security and storage products. Symantec helps its customers, which range from large enterprises to individuals, to protect their systems and data by delivering software and services that address risks to information security and system performance. The Company's delivery network consists of 50,000 partners worldwide, and includes relationships with original equipment manufacturers (OEMs), Internet service providers (ISPs), and retail and online stores.
Symantec faces intensifying competition from a number of new market entrants, including such as Cisco Systems, Juniper Networks and Microsoft. While Symantec has head start, the increased competition will undoubtedly drive down prices and comes at a time when overall market growth for security services has been slowing.
[edit] Product Offerings
During the fiscal year ended March 30, 2007 (fiscal 2007), Symantec operated in five segments: Consumer Products, Security and Data Management, Data Center Management, Services and Other.
Consumer Products focuses on Internet security. Key products include Norton Internet Security, which protects against viruses, worms and other security risks; Norton AntiVirus, which removes viruses, Trojan horses and worms; and Norton SystemWorks, which enables users to maintain and optimize their computers. The Consumer Products segment accounted for 34% and 51% of total revenue in FY 06 (Mar.) and FY 05, respectively.
Enterprise Security provides security throughout the network including behind the gateway and at the client level (desktop PCs, laptops and handhelds). The company's enterprise security solutions address the following areas: Antivirus, Antispam, Compliance, and Managed Security Services. The Enterprise Security segment accounted for 26% and 37% of total revenue in FY 06 and FY 05, respectively.
Data Protection provides software solutions designed to protect, back up, archive and restore data across the enterprise. This segment was acquired through the Veritas acquisition and generated $744 million, or 18%, of total revenue in FY 06.
Storage and Server Management helps customers to manage heterogeneous storage and server environments. This segment accounted for 19% and 11% of total revenue in FY 06 and FY 05, respectively.
Services assist SYMC's customers in implementing, supporting and maintaining their security, storage and infrastructure software solutions. Services accounted for 3% and 1% of total revenue in FY 06 and FY 05, respectively.
In April 2007, SYMC acquired Altiris (ATRS), a provider of software that manages endpoint security, compliance and remediation, for $33 per ATRS share, or $830 million in cash, net of cash acquired. Altiris's products complement SYMC's enterprise security products and strengthen its presence in mobile devices and medium-sized businesses.
Altiris Solutions manage and secure technology through automation, reducing the cost and complexity of information technology ownership. Service-oriented management is the Altiris business unit’s vision for IT service management technology. This technology helps IT organizations manage diverse and distributed IT assets and data, align IT lifecycle service management with business objectives and automate operations of client, server, mobile and network devices. Altiris solutions help drive IT compliance, identify underutilized IT resources and reduce maintenance overhead. Altiris solutions also help balance employee productivity with secure technology and data.
Lifecycle Management Solutions provide customers with holistic visibility and control of heterogeneous IT assets from cradle to grave. These allow customers to self-discover and inventory IT assets, automate deployment and management of IT resources and virtualize and provision real-time IT infrastructure services.
Automated Systems Management Operations help customer create repeatable, predictable and invisible systems management that improve service to the business and eliminate many manual processes that tend to create technology, personnel and process silos.
Extensible Management Architecture offers customers a platform for solution development and process-aware integration that allows them to manage heterogeneous environments through a centralized CMDB. It also increases IT worker efficiency via a centralized, role-based Web console and decision dashboards and serves as a foundation of industry-standard management platform strategy.
[edit] Recent Acquisitions
In February 2007, Symantec completed the acquisition of 4FrontSecurity, which develops risk software, assessment software, and content-rich assessment tools. In December 31, 2006, the Company acquired Company-I Limited, which specializes in addressing challenges associated with operating and managing a data center in the financial services industry.
[edit] Trends and Forces
[edit] New market entrants intensify competition
Symantec faces increased competition from both startups and large established corporations such as Cisco Systems, Juniper Networks (JNPR) and Microsoft (MSFT). The latter entered the consumer anti-virus industry in mid 2006 after acquiring Giant Software and GeCad two anti-virus/spyware protection companies. Its new product, OneCare, includes a firewall, data backup software, anti-virus, and spam protection all in one. Given the popularity of the Windows operating system, Microsoft could pose a significant threat to Symantec, as the former continues to improve its offering. Even if Microsoft doesn't displace Symantec, the entrance of such a large competitor into the market could lead to significant price competition.
[edit] Increasing demand for bundled security and storage backup
People are leading increasingly digital lifestyles. The PC is at once a means of communicating (email, Skype, etc.), a source of entertainment (music, videos), and even a store of valuable personal memories (photos). Not surprisingly, as the role of the PC has evolved over time, so has the demand for security and storage products. Consumers, are increasingly interested in bundled security (PC and internet) and information storage to protect valuable information. Symantec's acquisition of Veritas along with the company's longstanding expertise in internet and PC security, leaves it well positioned to respond to this change in consumer demand.
[edit] Competition
The market for spyware protection is growing faster than the anti-virus market, and companies like Webroot Software, Yahoo, and Microsoft have an early lead. Companies like Cisco Systems and IBM offer higher-value security solutions that will capture the majority of enterprise spending on security. Other competitors include McAfee, Trend Micro, CA, Inc., EMC Corporation (EMC), CommVault Systems, Inc. and VeriSign. Symantec, continues to dominate the consumer anti-virus sector, with over 64% market share, more than 3x as much as McAfee, its nearest competitor.
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