Symantec has announced that its Board of Directors has unanimously approved a plan to separate the company into two, independent publicly traded companies: one business focused on security and one business focused on information management (“IM”).
The security vendor’s decision to pursue a separation follows an extensive business review of the company’s strategy and operational structure, a move which has been backed by IDC analyst Fayaz Khaki.
“Symantec have been toying with a split for a while – it has finally happened,” Khaki says. “It does make sense to split the two businesses especially if integrating them proved to be either problematic or difficult to align strategies.
“The security market has and continues to evolve away from the areas in which Symantec have traditionally generated the most revenue.
“As a result, their security business has come under threat recently by other niche vendors and also by smaller vendors who have been able to respond to market changes quicker.”
Announced late last week, Symantec says creating two standalone businesses will allow each entity to maximise its respective growth opportunities and drive greater shareholder value.
“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,” says Michael A. Brown, president and CEO, Symantec.
“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.
"Taking this decisive step will enable each business to maximise its potential. Both businesses will have substantial operational and financial scale to thrive.”
According to Khaki the split allows Symantec to react to market changes quicker and also to ensure they can focus on a purely security related market strategy.
“Theoretically this should allow Symantec to bring products to the market faster,” Khaki claims. “Symantec – indeed all traditional security vendors – are at crucial junctures in their history.
“The growth in the industry will come from cloud and mobile technologies, the Internet of Things (IoT) is also a huge potential growth market.”
Growth in the traditional markets however, in which security vendors play, i.e. desktop, laptop security, is fairly flat, Khaki adds.
“Security vendors need to adapt to ensure they don’t miss market opportunities – speed to market with the right products is key to ensuring relevance and long term growth.”