Symantec’s New CEO Is Committed to Growing with the Channel

Competitors have crowed about stealing accounts and robbing market share away from Symantec. They say they’re slowly chipping away at Big Yellow’s dominance in the security industry because Symantec has become distracted by its adventures in storage and systems management. And many solution providers say they are switching away from Symantec because of poor products and support.

Enrique Salem, Symantec’s chief operating officer, is unfazed by the charges, and glibly says that many of his rivals’ combined revenue couldn’t equal Symantec’s security software sales, which last year topped more than $1.7 billion (£1.2 billion).

“It’s frustrating to me when I hear, ‘Hey, there’s that Enrique, the guy from the anti-virus company,’” he says. “We’re a company with $6 billion (£4.3 billion) in revenue; there’s a lot more that we do than just anti-virus.”

While rivals and critics are quick to agree with Salem’s statement about Symantec being more than just a security company, they typically mean it in a derogatory sense. Under CEO John Thompson’s leadership this past decade, Symantec has grown from an anti-virus company to a multibillion-dollar software powerhouse with more than one-half of its revenues coming from storage management software acquired by Veritas.

Under Thompson’s watch, Symantec has acquired nearly three dozen companies, each time adding new technologies, products and capabilities to its mix. Integrating these technologies has been a logistical nightmare and has caused numerous missteps. But Thompson achieved his goal of creating a company that is first and foremost about information management.

Salem, who will succeed Thompson next month as chief executive, has no plans to respond to his critics or alter the course Thompson set Symantec on. Rather, he plans to hone Symantec even tighter on the three pillars of the company: security, storage and systems management.

“You have to focus on what matters, and it’s not the disks and it’s not the PCs. It’s information,” Salem says in an interview with Channel Insider. “Our company needs to be focused on security and the management of information. Don’t expect us to get into the firewall business; it’s not what we do.”

Salem is an executive who has spent much of his career at Symantec in various positions. The most significant job he’s held outside Symantec was CEO of Brightmail, an anti-spam service provider that Symantec acquired in 2004 for $370 million. Thompson last fall chose Salem to succeed him as CEO; Thompson is retiring but will remain on the board of directors. Thompson declined requests for interviews.

While Thompson was manically focused on growing Symantec’s revenue and size, Salem is taking a different approach by choosing to focus on the quality of the business and enhancing Symantec’s relevancy in the marketplace. His belief is relevancy will triumph revenue performance, and will ultimately make the difference between a successful company and a failed business.

“[Thompson] did a fabulous job of building scale, and I’m looking forward to using that scale to be the leader. I’m not excited about being the CEO of the fourth largest software company. I’m more worried about relevancy position compared to other companies. When we have leadership in certain segments, we will maintain our relevancy,” he says.

That’s not to say Salem isn’t concerned about revenue growth. He is. With relevancy comes growth and new opportunities. Achieving that growth, he says, requires the support and success of Symantec’s 59,000 partners around the world. That dependency and shared success is the reason Salem says Symantec will remain committed to its channel partners—OEMs, value-added distributors, resellers and retailers—to engage with customers and drive Symantec product sales.

“The question that should be asked is, ‘Can our partners make more money with us?” he says. “We should help our partners get into more accounts. With our integrated products, our partners can get into more accounts and recognize more opportunities.”

Symantec is in the process of integrating two of its most recent acquisitions—Altiris (systems and configuration management) and Vontu (data loss prevention) into its portfolio and channel programs. And it is still grappling with fully integrating the storage management technologies acquired with Veritas five years ago. The company doesn’t have the most stellar reputation for assimilating the companies it acquires, and there are numerous examples of gaffes that have negatively impacted Symantec’s sales.

But integration of both the channel programs and underlying products and technologies is what gives meaning to the information management framework created by Symantec over the last decade. Salem recognizes the integration shortcomings and says improving integration and partner training will be a priority going forward.

“If you don’t do a good job of integrating the technology in a way that’s easy to understand by the customer and implement by the partner, you’re doomed for failure,” Salem says.

Integration is also critical in the rapidly growing and evolving software-as-a-service and managed services marketplace. Symantec acquired managed security service provider Riptech in 2002, providing it with the foundation for becoming one of the largest providers of security services. It’s developed a remote backup service that currently manages more than 30 petabytes of data and is adding more than 5 petabytes per quarter.

Symantec has come under fire for the way it handles renewals for its subscription-based services. While solution providers are often compensated for the initial sale or referral of a service, some say Symantec unfairly cuts partners out of the renewal revenue business.

Salem acknowledges that the services renewal business is a tricky issue. While stating the partner should get a commission for making the sale and have access to the back-end revenue, he believes partners can and should make more money on the integration services required for migrating customers to a services offering and through the sale of additional service offerings.

“We need to keep the partners selling more and more things, and have the partners selling more services,” he says. “The only way we’re going to grow is if the partner brings us to the customer.”

Last summer, Salem was criticized for telling market analysts that Symantec would take more of its top tier accounts direct and give large customers the option to bypass solution provider and distribution channels. While the reports were later refuted, the coverage raised doubts in Symantec’s commitment to channel partners, especially after Salem takes the helm.

“The amount of business we do through the channel is increasing, not decreasing,” he says. “The partners that are going to be successful with Symantec will be the ones that invest into growing their Symantec business.”