Network Associates blames sales dive on accounting changes

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Network Associates blames sales dive on accounting changes

Will Garside
Network Associates has suffered a 72% drop in sales in the three months ended December 31 compared to the same period last year.

Will Garside

The company has blamed the fall-off on changes in its accounting methods, principally with the point at which it records incomes from sales.

Chris Howell, European vice-president for finance and operations said, "The change in accounting procedures to sales-through as opposed to a sales-in model has distorted these figures."

However, Ovum e-business analyst Paola Bassanese said this was not the sole reason for the company's poor performance.

"NAI have been plagued by accounting irregularities in the past and this combined with weaker European sales has affected them. Their vision of creating a suite of security products is no longer unique and they are starting to feel pressure from rivals such as Symantec and Baltimore," she said.

In a report released earlier this month, Gartner said the company's policy of acquiring well-known security vendors, such as McAfee and PGP and grouping them together was a "questionable business model", as each product required considerable capital investment. The report concluded that there was little benefit in grouping these products together as users appeared to be committed to buying "best-of-breed" products from multiple sources rather than relying on a single vendor.


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