Symantec began to reap the rewards of its August acquisition of Blue Coat Systems as Symantec was able to expand its enterprise security portfolio through new offerings and post revenue growth for the first time since 2Q14.
Reported revenue was up 8.1 percent year-to-year in 3Q16 to $979 million, supported by gains in its enterprise security segment due to revenue contributions of over $100 million from Blue Coat Systems in the two months following the acquisition, says Jane Wright, principal analyst at TBR.
Symantec Revenue by Segment
Consumer Security $405 million (–4 percent)
Enterprise Security $574 million (+18 percent)
“There’s more integration work ahead, but I’m confident about our future. Since closing in August, we’ve brought to market two significant new solutions integrating the Data Loss Protection and Cloud Access Security Broker technologies and shipping Symantec Endpoint Protection 14. This integration has improved our existing products which are now blocking an additional 500,000 attacks per day across the endpoint and network,” said Greg Clark, CEO of Symantec.
Symantec Revenue by Geography
|Americas (U.S., Latin America, Canada)
|EMEA (Europe, Middle East & Africa)
|Asia Pacific & Japan
Symantec’s enterprise security segment revenues grew by 18.1 percent year-to-year to $574 million, while its consumer security revenue declined by 3.6 percent year-to-year to $405 million in 3Q16. The acquisition of Blue Coat Systems provided significant benefits for Symantec by enabling for an integrated security portfolio that pairs Symantec’s established brand with security offerings brought to the table by the heritage Blue Coat Systems portfolio.
Further development of Symantec’s portfolio will enable the organization to stave off declining revenues that had impacted its ability to grow over the past several years. This will be key to ensuring profitability moving forward for Symantec, as its operating margin fell 1,220 basis points year-to-year to -1.2 percent in 3Q16 following its investment in purchasing Blue Coat Systems.
Launched cloud-based security service for SMB customers
Customers with limited security staff or other resources are increasingly choosing cloud-based services to consumer endpoint security technologies, such as malware detection and blocking. Symantec addressed this growing requirement with its Symantec Endpoint Protection (SEP) Cloud, announced in September. SEP Cloud provides Software-as-a-Service-based delivery of Symantec’s flagship SEP technology to organizations with fewer than 1,000 employees. The new offering was overdue, in TBR’s opinion, but will now help Symantec compete against similar services that have been available for a longer time such as the Trend Micro Worry-free Business service and Webroot SecureAnywhere Business service.
Added a key reseller for Symantec Encryption Everywhere
Symantec’s goal is to help encrypt the world’s population of legitimate websites. In July, Symantec moved closer to that goal by signing up The SSL Store in July as its first reseller for Symantec’s Encryption Everywhere program. Encryption Everywhere competes with GeoTrust and Thawte, providing encryption algorithms and authentication mechanisms for website owners. TBR expects the addition of The SSL Store will expand Symantec’s already strong reputation and reach in the SSL management and code signing market.
Partnered with VMware to strengthen AirWatch security controls
In October, Symantec and VMware announced plans to supply Symantec’s extensive database of threat intelligence, delivered from Symantec’s Global Intelligence Network (GIN), to the VMware AirWatch compliance engine, helping to detect and stop cyberattacks on mobile devices. However, TBR believes Symantec’s partnership with AirWatch is not a key differentiator; other security vendors such as Palo Alto Networks, Check Point, FireEye and Proofpoint have similar agreements.