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Symantec mulling over splitting itself up in two separate businesses

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October 9, 2014

After eBay said two weeks ago that it will split itself up from PayPal and just this week HP announced that it will also split itself up into two separate businesses, now it's the turn of Symantec to do the same.

To be sure, Symantec acquired Veritas for a massive $13.5 billion a little over ten years ago, promising synergies between its existing security business and Veritasí backup and storage management software.

Well, the two synergies didnít appear to really work, and Symantec's storage business has lacked sparks of sort, as has its security business in the last few months.

To be sure, revenues went down from fiscal 2013 ($6.9 billion) to $6.7 billion for the full year 2014, and profits were much lower in both 2013 and 2014 than in 2012.

Symantec is still one of the largest supplier of storage software, with IDC giving it a 13.3 percent share of a $3.8 billion market, following IBM with 16 percent and EMC with 25.9 percent.

But security revenues have been impacted by the recent rise of tablets, which donít use it, and the fall in PC sales, which do.

The company recently changed its CEO, with board member Michael Brown replacing Steve Bennet. His job was to get the company growing again after Bennet, hired to do the same job after prior CEO Enrique Salem was given the elbow, failed to do just that.

The executive board had reportedly hired JPMorgan Chase to look at strategic options for Symantec in April this year, shortly after Bennet was booted out, while Brown was the interim CEO.

Bloomberg and other media outlets are now reporting that Brown wants to unravel the Veritas acquisition and have two nimbler and more focused businesses.

Ironically, Symantecís chairman is Dan Schulman, president of the soon-to-be-spun-off PayPal.

A spinned-off Symantec storage business would have revenues from legacy data protection products, such as Backup Exec and NetBackup, but would also need far-sighted and bold decisions to enable it to take advantage of server-side storage, where all the growth is these days.

Additionally, copy data management is another promising area as is replication-based protection.

Overall, the security business also needs a shake-up of sorts, as legacy PC anti-virus is not a growth business anymore.

But there are still lots of opportunities as security breaches are ramping up almost on a daily basis.

Symantecís issue has been inadequate management responses to changes in the security and storage markets. Splitting the company into two smaller units may seem like a good idea, but Symantec still needs to address its disfunctional executive staff.

Source: Diablo Technologies.

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