Symantec split to cost up to US$220m

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Symantec split to cost up to US$220m

Symantec executives said they expect layoffs and departures to add up to roughly 10 percent of the workforce as the company splits into two separate publicly traded companies.

The split will cost the company US$220 million in separation costs, including restructuring expenses, executives said in the company's second-quarter call with financial analysts. The layoffs will enable Symantec to become a "leaner and more efficient organisation," said Thomas Seifert, executive vice president and CFO of Symantec.

"Our philosophy is to manage each business separately, minimise disruption to our businesses, partners, customers and employees and execute a well-managed separation," Seifert told financial analysts on Wednesday.

Seifert said some of the savings from the layoffs would be invested in building out the company's priority areas of mobile, services, data loss prevention, advanced threat protection, backup and backup appliances. The separation is expected to be completed by the end of 2015.

On Wednesday, the company posted fiscal 2015 second-quarter net income that rose to US$244 million, or US35 cents per share, in its second quarter, from US$241 million, or US34 cents per share, a year earlier. Revenue fell 1.2 percent to US$1.61 billion, slightly missing the average analyst expectations of US$1.62 billion.

Some of the costs associated with the separation includes splitting up the new license and renewal sales teams. The company created a contract-separation project to divide up contracts associated with both information management and security product lines. Symantec also is delaying the creation of two parallel organisational structures until late in the process, Seifert said.

Since it announced its historic decision to break up into separate information management and security businesses, Symantec has been adding new product offerings. Symantec CEO Michael Brown said the company is building connections among its products to build out an intelligence platform.

"It's about integrating [advanced threat protection] and [data loss prevention] capability across more of these products at the various control points," Brown said.

In addition to its new threat-intelligence service, Symantec is developing an Endpoint Security Advanced Threat Protection appliance as an add-on for its Endpoint Protection customers.

The company will introduce its Advanced Threat Protection Defense Gateway early next year. It includes cloud-based sandboxing, similar to services and appliances from rival Intel Security (formerly McAfee), and networking security vendors Palo Alto Networks, FireEye, Fortinet, Check Point and pure play vendor Lastline.

Symantec said its second-quarter license revenue grew 25 percent year-over-year driven by sales of its NetBackup appliances. Renewals also showed gains, posting a 6 percent year-over-year increase, buoyed by its Storage Foundation and Enterprise Backup product lines.

Enterprise Security revenue decreased 1 percent year-over-year to US$511 million as growth in its Endpoint Protection and DLP products were offset by weakness in Endpoint Management, the company said.

Despite the decline, the company said it is seeing increased adoption of its data-loss-prevention software, which is up 18 percent year-over-year. Symantec released version 12.5 of its data-loss-prevention platform in June. User authentication has also risen.

Symantec's information management business grew revenue by 3 percent year-over-year to US$621 million. Growth in Enterprise Backup was offset by weakness in information availability, the company said.

Interest in the Symantec Disaster Recovery Orchestrator, which enables businesses to automate and manage disaster recovery of Microsoft Windows-based applications residing on either physical or virtual machines to the Microsoft Azure cloud, is also rising. The company plans on adding support for Amazon Web Services next year.

This article originally appeared at crn.com

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