Is Symantec up for sale? - May 6, 2008
John Thompson must have known the question was coming. The Symantec CEO certainly heard the rumors. So when he was asked Wednesday night during his company’s earnings conference call about selling off parts of his company, Thompson couldn’t have been clearer.
“Contrary to popular rumor, we have no plans to divest of anything,” he said. “None.”
The rumors mainly involved the storage products that Symantec acquired from Veritas three years ago. And they were widely circulated. According to an Associated Press earnings preview story that ran this week:
Analysts are particularly interested in the possible sales of backup and recovery software product NetBackup and the company’s non-Windows Data Center Foundation, which comprises of storage and server management products.
Several technology bellwethers, including IBM, Hewlett-Packard and EMC have been named as potential buyers for Symantec’s storage products, including NetBackup. One executive from HP who did not wish to be known is quoted as saying "he has meet with John (Thompson) and it's all but signed."
AP could have added two other bellwethers who have been mentioned as suitors of all or some of the Symantec storage products - Oracle and Microsoft.
From the tone of Thompson’s voice when he answered the question, he’s not happy with the rumors. Yet Symantec is at least partially to blame. There have been frequent reorganizations since it bought Veritas, usually accompanied by layoffs. Symantec admitted a large layoff in April but would not give details. This left the door open for scared Symantec employees, disgruntled former employees and opportunistic competitors to attempt to fill in the details. And Symantec execs have talked about getting rid of poor performing units on previous earnings calls.
But Wednesday’s call was upbeat. Symantec reported outstanding results all around, and storage was front and center. Email archiving, backup, and storage management were among the product segments that posted double-digit year over year growth. Thompson and COO Enrique Salem talked of a bright future for Net Backup 6.5, Backup Exec 12, and Storage Foundation. They emphasized Symantec’s encryption and virtualization capabilities and gushed about three hot storage areas where Symantec has hardly been a pioneer: data deduplication, continuous data protection and software as a service (SaaS).
Symantec’s earnings were impressive in current economic conditions, although with 53 percent of its revenue from international sales, it took advantage of favorable foreign exchange rates against the dollar. Symantec gained share from its major rival EMC on the backup front, with 11 percent year-over-year growth compared to EMC’s 8 percent growth.
The question now is whether the strong storage performance will prompt Symante execs to forget about spinning off any pieces, or will it only add to the value of a possible sale? Thompson’s take is nothing is for sale. Despite what you might have heard.
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