Analysts react to Symantec split announcement

Symantec never delivered on their promises for storage, but the split means a less than appealing option for some organizations

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On Thursday, Symantec said that it would separate into two business units; one that focuses entirely on security, while the other sticks to information management.

Symantec's announcement follows similar ones from Hewlett-Packard, which said they would spin off their PC and printer business into a new company called HP Inc., and eBay, which said that PayPal would be turned into a new publicly traded company.

In a statement, Michael Brown, Symantec's president and CEO, said that separating would provide each business the flexibility and focus needed to drive growth and enhance shareholder value.

The concept of growth and value has been something Symantec has had to struggle with over the years. Many business leaders were left disappointed after Symantec's $10.2 billion acquisition of storage vendor Veritas in 2005.

"Symantec never delivered on any of the integration between security and IT operations that it promised were in the works. And at the time of acquisition, Veritas was not only the leading enterprise backup vendor but also had the leading volume manager, file system, host-based replication, and clustering technology in the market, but the latter products have all since had limited success as technology has changed," commented Forrester's Stephanie Balaouras, in a statement.

"Splitting allows each of the new companies to concentrate on their areas of focus. But as standalone companies, they are less appealing as to a CIO who is looking for a handful of strategic partners in technology. The artist formerly known as Veritas is appealing to the VP of IT operations, while the security part of Symantec would be appealing to the CISO."

New divisions would be easier to acquire

The data division within Symantec will consist of their backup and recovery, archiving, eDiscovery, storage management, and information availability product lines. The security division will cover more ground, consisting of Symantec's SSL, DLP, and MSP offerings, in addition to endpoint protection and management, data encryption, mobile, authentication, and hosted security.

"Storage is moving away from appliances and towards software-only storage. Symantec's storage assets would be easier to acquire without the security business because its backup and archive solutions could flesh out a vendors software defined storage portfolio," said Forrester's Henry Baltazar.

Symantec hopes to complete the spin off by December of 2015.

Augmenting Baltazar's thought's on the topic, Piper Jaffray research analyst, Andrew J. Nowinski, speculated that when the split is complete in 2015, Cisco would likely look towards purchasing Symantec's security assets, "and quickly triple the size of their threat intelligence network."

He added that NetApp would be a likely contender for the storage division, as it would allow the company to better compete against EMC.

Copyright © 2014 IDG Communications, Inc.

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