Is It Time to Take Another Look at Symantec?

The Veritas acquisition caused some problems, but close partners say the security giant is back on its game.

By all accounts, Symantec Corp.'s acquisition of Veritas four years ago was a mess. Even Chief Operating Officer Enrique Salem acknowledges that the software giant learned valuable lessons -- of the hard-knocks variety -- from the deal.

But the company is growing increasingly confident that it has put the hard times behind it and built a solid blueprint from the Veritas experience for integrating subsequent and future acquisitions much more smoothly.

While some speed bumps still exist, including a senior-level channel shake-up and lingering doubts about the company and its products in the channel, Symantec and some of its tightest partners see reason for optimism.

With its portfolio of dozens of Microsoft-related products and solutions across security, storage and systems-management categories, Symantec presents clear opportunities for Microsoft partners. Now that Symantec is making an effort to shake off some of the real and image-related problems of the last few years, the question is whether it's time for Microsoft partners to take another look at representing Symantec.

Dealmaker's Lessons
There's no question Symantec had a hard time swallowing the Veritas acquisition. At the October Symantec PartnerEngage

conference in Washington, D.C., Salem said the company learned several things, the most important of which was that it should have acted faster. It was understandable for Symantec to tread gingerly at the time. Symantec and Veritas were practically equals in the deal, which was valued at about $13.5 billion when it was announced in December 2004 and which closed in July 2005. Salem acknowledges that one of the two corporate cultures should have been named the alpha dog earlier in the process, duplicate positions and departments should have been cut faster, and cross-pollinating research and development should have ramped up earlier.

Amazingly, the company is still making some adjustments. At the beginning of this year, Symantec went from having two major divisions based on the historical product areas of security (Symantec) and storage (Veritas) to a much more integrated approach with overlapping R&D. Part of that was driven by last year's acquisition of Altiris -- as well as a handful of other systems-management tool vendors -- that no longer allows for such a straightforward split of the business anymore. Dozens of products are now spread across broad categories and sold as solutions. Part of the point of the recent partner conference was to introduce partners to the concept of representing more products.

Randy Cochran, Symantec vice president of channel sales in North America, says the word to partners over the last few years had been, "'I don't need a lot of shareshift.' The message [to partners] was, 'Stay in your lane.'"

Now Symantec wants partners in as many lanes as possible. "We're integrating our partners," Salem says. "We want them in the same program." Bill Robbins, senior vice president for Symantec's Americas Geography, told partners that Symantec customers currently have an average of 2.8 products installed. "There's tremendous opportunity for us to go in there and upsell," he said. The Symantec portfolio now consists of more than 100 products as the company continues to acquire other companies, and the message is clear: More acquisitions and products are on the way.

"Our current plan is to spend about $1 billion per year on three to six acquisitions per year," COO Salem says (see "An Acquisitive Streak").

A Bumpy Road
Dealing with acquisitions isn't Symantec's only challenge when it comes to partner perceptions. About six months into his tenure as COO, Salem made some comments to analysts over the summer that caused a serious flap in the channel. Salem told the investors that Symantec would give its 700 to 900 largest accounts the option of working through the channel or dealing directly with Symantec's salespeople.

An Acquisitive Streak

Symantec Corp. is a company built up from acquisitions. Company officials say they plan to continue buying three to six companies a year for the foreseeable future. Below are Symantec's major acquisitions, including the month the deal closed, dating back to 2002.

Message Labs
Expected to close in calendar year 2008 (announced Oct. 8, 2008)
Provider of online messaging and Web security services

PC Tools
Expected to close in calendar 2008 (announced Aug. 18, 2008)
Global provider of software products designed to protect the privacy and security of Windows computers

June 2008
Privately held online-storage company

April 2008
Privately held application-streaming technology provider

December 2007
Data-loss prevention solutions provider

April 2007
Service-oriented management software vendor

December 2006
A U.K.-based professional services firm focused on enterprise data center optimization and storage management

February 2006
Data center change- and configuration-management solution provider

February 2006
Provider of enterprise software for instant messaging

BindView Development
January 2006
Global provider of agentless IT security compliance software

Sygate Technologies
October 2005
Provider of enterprise network access control solutions

Whole Security
October 2005
Provider of behavior-based security and anti-phishing technology

July 2005
Merger with major storage software company

October 2004
Digital security consulting company

LIRIC Associates
October 2004
U.S.-based security-assessment consultancy

July 2004
Make of an anti-spam router

June 2004
Provider of anti-spam technology at the gateway

ON Technology
February 2004
Provider of software distribution, inventory management and patch management

December 2003
IT management technology company

October 2003
Provider of SSL VPN appliances

July 2003
Maker of security appliances

Recourse Technologies
August 2002
Provider of network intrusion-detection and "honeypot" solutions

August 2002
Provider of managed security services

Security Focus
August 2002
Provider of security threat-management systems and services

Mountain Wave
July 2002
Provider of enterprise security-management software and services

Source: Symantec Corp.

He still finds himself explaining those comments. "Below 5,000 users, that's going through the channel -- no ifs, ands or buts," Salem told a group of reporters at the PartnerEngage event. "[Our top] 900 or less [customers, we're] giving them a choice to work with Symantec or not." Salem says the comments reflected Symantec's standing policy and even helped partners who are really affected by clarifying the level below which Symantec would not go direct with customers. Several of Symantec's closest partners at the show agreed with Salem's characterization and said they were unfazed by the summertime hubbub. Nonetheless, the deal did some damage to Symantec's image in the channel community at large by raising questions about Symantec's commitment to the channel model.

Another high-profile litmus test is emerging about Symantec's channel commitment in the wake of Julie Parrish's defection -- which became official in November -- from her job as global channel chief at Symantec to a similar role at NetApp. Asked whether Parrish would be replaced, Salem responds: "I'm not 100 percent sure. Stay tuned." For now, the company is spreading Parrish's former powers out to the three regional channel chiefs -- to Cochran and to his counterparts in EMEA and Asia.

Despite these uncertainties, Symantec stressed at the conference that partners are Symantec's "heartbeat," accounting for the bulk of the company's sales. "Symantec cannot succeed without its partners," Salem said at the event.

A Special Relationship with Microsoft
Symantec has a surprisingly high number of Microsoft-related software solutions, when you consider that in addition to its Windows-critical anti-virus and security roots, the Cupertino, Calif.-based firm has added Veritas' Windows-heavy storage products, Altiris' Windows-heavy systems-management products and other companies in between.

One slide in the standard Symantec presentation asserts the following: "Other than Microsoft, Symantec provides more solutions for Microsoft Windows than any other vendor worldwide." When it comes to smaller customers, it's all partner-led and nearly all Microsoft-focused. "A lot of what's sold in that low-end space is anti-virus and Backup Exec," Cochran says.

Symantec's 'Key Plays' for Selling Backup Exec

Symantec Corp. recently came out with Backup Exec version 12.5. In a recent briefing for partners, the company offered the following four "key plays" for partners selling Backup Exec, which is arguably Symantec's most important Windows-focused product:

Windows Leadership Advantage
  • Emphasizes Symantec's push to make Backup Exec first to market with latest Certified Windows support
  • Rides the Windows upgrade wave as customers move to the latest Microsoft product

    Virtual Systems
  • Capitalizes on the fact that almost every customer is deploying virtualization
  • Supports VMware Inc., Hyper-V and Citrix Xen
  • Offers competitor-replacement opportunities
  • Leverages NetBackup technology

    Granular Recovery Technology
  • Allows administrators to recover individual e-mails, user preferences and documents

    System Recovery
  • Is enabled through integration with Backup Exec System Recovery 8.5
  • Back in February, Symantec rolled out Symantec Solution for Windows to start getting its customers and partners thinking about what the company has for Redmond's platform. In a release timed to the Windows Server 2008 launch, Symantec noted that it was supporting more than 20 products on the new server OS, including Backup Exec, Backup Exec System Recovery, NetBackup, Symantec Protection Network's Online Storage for Backup Exec, Symantec Endpoint Protection, Storage Foundation for Windows, Altiris Notification Server and Altiris Management Suite.

    New Efforts Take Wing
    Bringing all those offerings together is a challenge that Symantec, which bills itself as the world's fourth-largest software company, shares with other big players. Microsoft, CA Inc., IBM Corp., Oracle Corp. and Hewlett-Packard Co. all face the issue of having bought up much of the rest of the software industry. Each megavendor holds in its hands a jumble of loosely connected products and inherited channel organizations. Now that Symantec is eager for its partners to represent more of its portfolio, how do they turn those partners into converts for the company's other product lines -- and the dozens more sure to come through future acquisitions?

    One approach has been a solution worksheet. Symantec divided everything it offers into 16 solutions on a two-page wide, laminated sheet and mapped those solutions to IT projects and Symantec products. Those solutions fall into five larger categories:

    • Security
    • Infrastructure Operations
    • Information and Risk Compliance
    • Storage
    • Business Continuity

    The newest approach is SymBrain, a tool posted to Symantec's PartnerNet portal, which helps partners turn IT keywords into solution sales with a full complement of Symantec products. The online database includes such data points as solution descriptions, challenges, questions to use to qualify customers, benefits and links to resources. The tool also shows a list of competitors for each solution, Symantec's competitive differentiators, success stories and next steps.

    "No matter where you are in there, there are opportunities to build out from your center of gravity. It doesn't mean you're selling the whole portfolio. Wherever you are, you can build out," says Sheri Atwood, senior director of strategic product marketing.

    Symantec also simultaneously launched the Symantec University for Partners in mid-October, an effort to consolidate and upgrade its partner-training resources on a global basis.

    Partners Encouraged
    While Symantec doesn't release partner numbers, the company acknowledges outside estimates of about 10,000 partners in North America and 60,000 worldwide. With its top partner level, Platinum, Symantec has been putting "more wood behind fewer arrows," Cochran says. "Five years ago, we had 100 Platinum partners; today we have 51," he says. "But revenue is four times what it was then."

    Some of Symantec's closest partners say they approve of the changes the company has been making. Tom Maloney, director of software sales for CDW Corp., says, "I think Symantec learned a lot with the Veritas acquisition. Operational issues can really stall revenue. It's greatly improved in the last 18 months. Some personnel changed. We saw [Chairman and CEO] John Thompson take an active role [in operational issues]. I don't spend any of my time talking to Symantec about operational issues anymore."

    For a giant reseller like Vernon Hills, Ill.-based CDW, the SymBrain tool is going to be extremely valuable. "Trying to get 3,000 salespeople trained the same way is nearly impossible," Maloney says.

    Mike Shook, president and CEO of Consonus Technologies Inc., a Cary, N.C.-based VAR, says the SymBrain and Partner University tools are going to be a help for ramping up less-experienced people: "I don't know of any other vendor partner that has a tool like that."

    An executive at a Midwestern VAR who asked not to be identified also says the SymBrain tool will help -- a little bit. "I think there are incremental opportunities, but it's not a game-changer," he explains, adding that VARs will have to be careful not to sell outside their areas of expertise. "It's dangerous to sell away from your core. It's the opposite of what we tell our partners."

    Meanwhile, he'd like to see better midmarket messaging from Symantec. "They've got to do a better job saying which software goes to midmarket," says the VAR, whose company is also a Microsoft Gold Certified Partner. Better packaging of products could help Symantec sales as well, he adds.

    All of that, however, is constructive criticism. Overall, the VAR says he sees good opportunities for existing Microsoft partners with Symantec software.


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