Rumours had been flying in early October that Symantec, the company perhaps best known for its range of Norton antivirus products, was going to be splitting its business in two. The company, based in Mountain View, California, have now confirmed that this is true.
Symantec will be splitting its security and data storage divisions into two separate companies, each individually traded on the stock market. The news will be happily received by investors and analysts, who have believed for a long time that the two components of Symantec’s business weren’t compatible with one another. While the company had believed integrating their two core branches was a good move years ago, it actually hurt their stock price.
According to Bloomberg, total revenue for the fiscal year of 2014 was $6.7 billion. User productivity, protection and information security all together created $4.6 billion in sales, while information management generated $2.5 billion.
Symantec released a statement to announce the news, citing a business review’s outcome that the business had to become more focused and nimble. Michael Brown, the Chief Executive Officer, said in the statement that it had become clear that to win in both the security and storage markets required separate strategies and investments.
The review of their business activity began in May, with the conclusion being that the negatives of keeping the two sections of the business under one umbrella outweighed the positives. Brown stated that the firm would be able to overcome any difficulties that arose from current contractual obligations to customers.
“There really are two different buyers and there are different buying criteria,” said Brown. “Information management is about cost and reliability and in security, it’s about what you can do in real time to defend against threats. This really allows each business the freedom to operate and develop its own unique strategies and investment profiles.”
Brown will remain as the CEO of Symantec’s security outfit, which will retain the famous brand name. It’s not known what the name of the storage business will be, but John Gannon (who joined in 2012 and formerly worked at HP) will front this as the general manager. The separation is expected to be fully finished by the end of 2015.
Symantec employees over 20000 employees in more than 50 countries at the present, but it’s expected that job cuts will follow for cost-cutting reasons, though not immediately.
Of the split, an analyst from Pacific Crest Securities, Rob Owens, said that it might allow one entity to become more strategic in looking for an acquisition.
Symantec aren’t the only big company to recently split their business into separate units. eBay announced in late September that it’d be splitting PayPal into its own company; Hewlett-Packard said in early October that that personal computers and printers would be detaching from corporate hardware and services.
The issue of splitting Symantec has been discussed for a long time over various CEOs. Enrique Salem and Steve Bennett, CEOs from 2009 to 2012 and 2002 to March 2014 respectively, both said that they wouldn’t do it.
Symantec Split into Separate Storage and Security Businesses
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