Symantec’s share price dipped last week following profit and sales forecasts that fell short of analysts’ estimates. The explanation from Enrique Salem, their CEO, was that companies were switching to shorter term one-year deals rather than buying three year licenses.
That’s no surprise of course. You can’t expect to continue to grow profit and revenues on commodity products in mature markets. Customers expect more for less each year. And in hard times, they’ll strike harder bargains and focus less on long term investments.
The underlying problem for security vendors is that they simply don’t have enough smart new products, preferring to bank on slick salesmen rather than innovative researchers. Aiming to squeeze more out of the same old cash cow will only slow down the inevitable journey towards extinction.