Symantec splits storage and security

Symantec is splitting its storage and security business, following just days after HP announced its split

Symantec is to divide its storage and security business, just days after HP announced its split.

Michael Brown, Symantec's president and chief executive officer, said: "Separating Symantec into two independent publicly traded companies will provide each business the flexibility and focus to drive growth and enhance shareholder value."

Brown joined the company following Symantec’s $5bn acquisition of Veritas in 2005, and become its CEO this September.

In August the company announced it would separate the Norton brand in a bid to drive greater margins into the business.

Its first quarter of 2014 results showed backup business grew 35% year-over-year. The company also introduced a backup appliance, which doubled the capacity of its enterprise backup appliance from 76TB to 148TB. At the time Brown said: the new appliance would  allow the company to target the upper mid-market of the enterprise segment and effectively double our addressable market

Symantec hopes that, by separating its security and storage business, it will be able to develop independent M&A strategies, potentially allowing a storage provider to acquire the former Veritas business.

The security business will include: consumer and enterprise endpoint security, endpoint management, encryption, mobile, Secure Socket Layer ("SSL") Certificates, user authentication; mail, web and datacentre security, data loss prevention, hosted security and managed security services.

The information management business will include: backup and recovery, archiving, eDiscovery, storage management and information availability products.

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Brown said: "Taking this decisive step will enable each business to maximise its potential. Both businesses will have substantial operational and financial scale to thrive."

Writing on the SeekingAlpha financial blogging site, independent research company AtonRa Partners observed that the acquisition of Veritas 10 had not delivered the expected revenue synergies. 

"Both businesses need to become more nimble in a tough competitive environment. Specifically, the storage industry, which is dominated by large IT players such as EMC or HP, has been facing strong pricing pressures," the analyst noted.

Henry Baltazar, senior analyst at Forrester, said: "Storage is moving away from appliances and towards software-only storage. Symantec's storage assets would be easier to acquire without the security business because its backup and archive solutions could flesh out a vendors software defined storage portfolio."

Like HP with its PCs, enterprise services, printers and datacentre businesses, Symantec is unable to maximise the potential of being a one-stop shop in terms of IT supplier relationship.

The challenge for the CIO is that the dynamics of the traditional IT supplier market is changing. CIOs are more prepared to work with startups and smaller IT companies to gain a completive edge. Sourcing is becoming more tactical. The industry is beginning to respond to the change in buying habits and it is highly likely further sell-offs, company splits and demergers will be taking place.

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